The Main Difference Between Direct and Indirect Taxes Is That

question 79

Multiple Choice

The main difference between direct and indirect taxes is that

• A)indirect taxes are automatically deducted from workers' paychecks and direct taxes are not.
• B)direct taxes are paid to state and local governments and indirect taxes are paid to the federal government.
• C)direct taxes are taxes levied on people and indirect taxes are taxes levied on activities undertaken by people.
• D)direct taxes are usually proportional and indirect taxes are usually progressive.

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Definitions:

Retail Sales Tax

A tax on the sale of goods and services that is usually calculated as a percentage of the purchase price and collected by the retailer.

Payout Rates

The percentage of earnings or profits that a company distributes to its shareholders as dividends.

State Lotteries

Government-run lotteries that operate as a form of gambling, providing revenue for public projects and services.

Casinos

Facilities that accommodate and house various types of gambling activities and entertainments.