Which of the Following Is True of the Alternative Minimum

question 63

Multiple Choice

Which of the following is true of the alternative minimum tax?

• A)The alternative minimum tax is designed to ensure that high income taxpayers do not pay excessive amounts of income tax.
• B)For 2017,the alternative minimum tax rates are 20 percent and 30 percent,depending on the taxpayer's income.
• C)The amount of a taxpayer's state income tax may not be deducted for the purpose of computing the alternative minimum tax.
• D)All tax-exempt interest is a tax preference item for the alternative minimum tax.
• E)None of the above are true.

---

Definitions:

Incidence of a Tax

The incidence of a tax refers to the distribution of the tax's economic burden among different stakeholders, such as consumers and producers.

Elasticity

A measure of how much the quantity demanded or supplied of a good responds to a change in price.

Price Ceiling

A legally imposed maximum price on goods or services, intended to keep prices affordable for consumers.

Shortage/Surplus

A surplus is the opposite of a shortage, occurring when the supply of a product or service exceeds its demand in a market.