When the Tax Rates Imposed on the Rich Are High

question 74

Multiple Choice

When the tax rates imposed on the rich are high, a reduction in these rates

• A) will always lead to a reduction in the tax revenue collected from the rich.
• B) will not affect the tax revenue collected from the rich.
• C) will increase the reported incomes of the rich and it may also lead to an increase in tax revenue collected from them.
• D) will decrease the reported incomes of the rich, and thereby reduce the tax revenue collected from them.

---

Definitions:

Perpetual LIFO

Perpetual Last-In-First-Out is an inventory cost method assuming that the last items added to inventory are the first sold, continually updating inventory and cost of goods sold values.

Ending Inventory

The overall price of items available for selling at the end of a fiscal period.

Inventory Units

Quantities of goods held by a business for the purpose of sale or production.

Purchase Discounts

Reductions in the purchase price of goods, usually provided by a supplier to the buyer for early payment or bulk buying.