Which of the Following Statements Is NOT True Regarding the Estate

question 8

Multiple Choice

Which of the following statements is NOT true regarding the estate tax?

• A) Political opponents have re-branded the estate tax as a "death tax."
• B) Estate taxes can be levied on both savings and properties that a deceased person passes on to his or her heirs.
• C) Critics argue that some estate taxes force family farms to be broken up upon the death of a property owner.
• D) Nearly everyone who inherits money must pay an estate tax due to federal laws.

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Definitions:

Personal Income Tax

A tax levied on the income of individuals, which can vary based on income levels and types of income.

State Excise Tax

Taxes imposed by a state on particular goods or activities, such as alcohol, cigarettes, and gasoline.

Federal Excise Tax

A tax imposed by the federal government on the sale of certain goods and services, such as gasoline, alcohol, and tobacco.

Efficiency Loss

The loss of economic efficiency that can occur when the balance between supply and demand is not achieved or when market conditions lead to a misallocation of resources.