Which of the Following Statements About a Progressive Tax Rate

question 54

Multiple Choice

Which of the following statements about a progressive tax rate structure is false?

• A) Progressive rates increase as the tax base increases.
• B) Progressive rates reflect the theory of the declining marginal utility of income.
• C) The federal income tax has always used a progressive rate structure.
• D) Progressive rates result in greater vertical equity than a proportionate rate.

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Definitions:

Treasury Stock

Shares that were issued and subsequently reacquired by the company, reducing the amount of outstanding stock on the open market.

Authorized Stock

Authorized stock refers to the maximum number of shares that a corporation is legally authorized to issue according to its corporate charter.

Market Value

The present cost at which an asset or service is available for purchase or sale in a market.

Share

A unit of ownership in a company or financial asset, representing a proportion of the corporation's capital.