If a Flat Tax Plan Allowed Individuals to Deduct a Standard

question 35

True/False

If a flat tax plan allowed individuals to deduct a standard allowance of $20,000 and the flat tax rate was 20 percent, an individual earning $100,000 would pay an average tax rate of 20%.

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Definitions:

Taxes

Compulsory contributions to state revenue, levied by the government on workers' income and business profits or added to the cost of some goods, services, and transactions.

Automatic Stabilizers

Economic policies and programs, like unemployment benefits and progressive taxation, that automatically help stabilize an economy by decreasing the effects of economic fluctuations.

Aggregate Demand

Aggregate requirement for goods and services within an economic system, evaluated at a fixed comprehensive price level over a defined period.

National Debt

The total amount of money that a country's government has borrowed, by various means, to cover its spending in excess of tax revenues.