A Key Lesson from the Payroll Tax Is That the

question 63

Multiple Choice

A key lesson from the payroll tax is that the

• A)tax is a tax solely on workers.
• B)tax is a tax solely on firms that hire workers.
• C)tax eliminates any wedge that might exist between the wage that firms pay and the wage that workers receive.
• D)true burden of a tax cannot be legislated.

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Definitions:

Base Salary

The initial rate of compensation given to an employee, excluding any bonuses or benefits.

Weighted-Average Inventory

A method of calculating the cost of inventory that takes into account the cost of goods sold and the remaining inventory.

Generally Accepted Accounting Principles

A set of rules and standards designed to improve the clarity, consistency, and comparability of financial reporting across different entities.

Fiscal Year

An accounting period of twelve months used for government or corporate financial reporting and budgeting, not necessarily aligning with the calendar year.