Question

19) A flat tax is a tax with a single margional tax rate. If households could deduct $15,000 and then face a marginal tax rate of 25% on all additional income, would the tax be: A) Proportional B) Regressive C) Progressive D) Regressional 20) Disposable income is defined as A) Income you throw away. B) Income after taxes. C) Income after taxes and essentials. D) Income after rent and insurance. 21) Which of the following statement about Social Security is true A) We may spend more on Social Security next year even if Congress does not vote to authorize more spending B) Congress chooses how much to spend on Social Security each year. C) Social Security is a discretionary program. D) Social Security spending is falling as more people retire. 22) Medicare provides public health coverage for(choose the best answer) A) Children B) Low income households C) Single people D) The elderly 23) Economists refer to spending by households as A) national income. B) savings. C) consumption D) disposable income. 24) A tax system that takes a higher percentage of income from poorer people is A) proportional B) progressive. C) regressive D) expressive. 25) Over the past 10 years, income taxes in New Mexico have A) decreased equally for high and low earners. B) decreased more for high earners than for low eamers. C) decreased more for low eamers than high eamers. D) increased for both high and low eamers.

Answer 1

19. Option A

Explanation: In a proportional tax rate system, all income earners face the same tax rate.

20. Option B

Explanation: Disposable income is the income left after paying taxes.