Scenario 20-1 The Government Is Proposing Switching from a Progressive Tax System

question 216

Multiple Choice

Scenario 20-1
The government is proposing switching from a progressive tax system in which families pay 15% of the first $50,000 earned, 25% of the next $50,000 earned, and 35% of any income over $100,000 to a tax system in which every family pays 20% of their income less $20,000.
-Refer to Scenario 20-1. What would the libertarians think of the proposed policy change?

• A)They would favor the current progressive policy over the proposed policy because it accounts for diminishing marginal utility.
• B)They would favor the proposed tax policy over the current progressive policy because it would result in a negative tax for the poorest families.
• C)They would favor the current progressive tax policy over the proposed policy because it rewards those who work the hardest.
• D)They would oppose both tax policies because both redistribute income.

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Definitions:

Transference

In psychotherapy, the process by which emotions originally associated with one person are unconsciously transferred onto the therapist.

Transference

A psychological phenomenon in which an individual redirects emotions and feelings, often unconsciously, from one person to another, particularly in the context of therapy.

Irrational

Referring to thoughts, actions, or behaviors not based on logical reasoning or rationality.

Self-centered

Describes an individual who is overly focused on their own feelings, needs, or interests, often at the expense of others.