Which of the Following Helps Explain the Difficulty in Solving

question 23

Multiple Choice

Which of the following helps explain the difficulty in solving the long-term debt problem in the United States?

• A) The decline in the strength of American political parties in recent years has made compromise in this area highly unlikely.
• B) The decline in social spending has reduced the level of economic growth in the United States.
• C) The Democratic Party has been captured by special interest groups that benefit from high levels of debt.
• D) The Republican Party refuses to reduce the level of taxes that restrict economic growth in society.
• E) The rise of extreme partisanship in recent years has made compromise in this area highly unlikely.

---

Definitions:

Tax Revenues

The income that is gained by governments through taxation.

Federal Deficit

The financial condition that occurs when the government's expenditures exceed its revenues in a given fiscal year.

Progressive Tax

A taxation system in which the tax rate increases as the taxable amount or income increases, commonly seen in income tax systems to ensure higher earners contribute a greater proportion of their income.

Regressive Tax

A tax system in which the tax rate decreases as the taxable amount increases, disproportionately affecting lower-income individuals.