"Bracket Creep" Happens When

question 79

Multiple Choice

"Bracket Creep" happens when

• A) tax liabilities are based on real income and there is a negative inflation rate.
• B) tax liabilities are based on real income and there is a positive inflation rate.
• C) tax liabilities are based on nominal income and there is a negative inflation rate.
• D) tax liabilities are based on nominal income and there is a positive inflation rate.
• E) too many peculiar people make their way into the highest tax bracket.

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Definitions:

Upper Two Quintiles

Refers to the top 40% of the income distribution in a given population.

Income

The financial gain or revenue received by an individual or entity, typically measured on a yearly basis.

Non-Cash Benefits

Compensation provided to employees or individuals in forms other than cash, such as health insurance, pension contributions, or housing.

Poverty Rate

The percentage of the population that lives below the nation's official poverty line, reflecting the proportion of individuals living in poverty.