During 1960-1980, Those with the Highest Incomes Confronted Federal Marginal

question 83

Multiple Choice

During 1960-1980, those with the highest incomes confronted federal marginal tax rates between 70 and 90 percent. Since 1986, the highest federal income tax rate has been less than 40 percent. Since 1986, the share of the personal income tax collected from the top one-half of one percent of earners has been

• A) substantially lower than during the 1960s and 1970s.
• B) only slightly lower than during the 1960s and 1970s.
• C) virtually the same as during the 1960s and 1970s.
• D) higher than during the 1960s and 1970s.

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Definitions:

TIE Ratio

The Times Interest Earned (TIE) ratio is a financial metric used to measure a company's ability to meet its debt obligations, calculated by dividing earnings before interest and taxes (EBIT) by interest expenses.

Profit Margin

A financial metric that measures the amount of net income earned with each dollar of sales generated by comparing the net income and the revenue of a company.

Debt Ratio

A financial ratio that measures the extent of a company's leverage, calculated as total liabilities divided by total assets.

ROE

Return on Equity (ROE) is a financial ratio that measures the profitability of a company in relation to shareholders' equity, indicating how well the company uses investments to generate earnings growth.