Which of the Following Is True Regarding State and Local

question 7

Multiple Choice

Which of the following is true regarding state and local taxes?

• A) All states impose a state income tax.
• B) Every jurisdiction imposes a sales or use tax.
• C) The primary purpose is to raise revenue.
• D)Property taxes are primarily used to finance a State's general revenue fund.

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Definitions:

Marginal Tax Rate

The rate at which the last dollar of a taxpayer's income is taxed, indicating the impact of the next dollar earned on their tax burden.

Proportional

Referring to a relationship where changes in one item directly mirror changes in another, often expressed as a constant ratio.

Tax System

The legal framework and mechanisms through which taxes are imposed on individuals, corporations, and transactions in a country, shaping the distribution of tax burdens.

Deadweight Losses

Economic inefficiencies that occur when the free market equilibrium is disturbed, resulting in a loss of economic value, often due to taxes, subsidies, or price controls.