Category: Taxation

A progressive tax system is one where ?

A. marginal tax rates are high.
B. higher income taxpayers pay more taxes than do lower income taxpayers.
C. marginal tax rates are low.
D. higher income taxpayers pay a greater percentage of their income in taxes than do lower income taxpayers.

Deadweight loss is greatest when ?

A. supply is elastic, and demand is perfectly inelastic
B. demand is elastic, and demand is perfectly inelastic
C. both supply and demand are relatively inelastic
D. both supply and demand are relatively elastic