One Reason Why It Is Difficult to Reform an Existing

question 38

Multiple Choice

One reason why it is difficult to reform an existing welfare system is that

• A) the people who provide these services currently are not willing to see their programs eliminated.
• B) any reform provides disincentives to both taxpayers and welfare recipients.
• C) the system has been fine-tuned to the point where further reforms are not cost effective.
• D) most families receiving assistance are lazy and would not benefit from welfare reforms.
• E) welfare is a right provided for in the Constitution.

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Definitions:

Vertical Equity

A concept in taxation that argues taxpayers with a greater ability to pay taxes should pay more, compared to those with a lesser ability to pay.

Marginal Tax Rate

The tax rate that applies to the last dollar of the tax base (income or wealth) earned.

Average Tax Rate

The ratio of total taxes paid to total income, representing the percentage of income that goes to taxes.

Income

The money received by a person or household from various sources like work, investments, or benefits, typically used for consumption, savings, and investing.