Question

Which of the following statements is true?

a. Flat tax systems avoid being regressive by allowing large reductions in the tax base.
b. The most regressive sales tax structures exempt food purchased at grocery stores from the tax base.
c. Ad valorem taxes are assessed irrespective of the value of the property.
d. Progressive tax structures lead to progressively lower tax rates over time to stimulate the economy and promote growth.

Answer 1

a. Flat tax systems avoid being regressive by allowing large reductions in the tax base.

Step-by-step explanation:

Flat tax systems avoid being regressive, allowing large reductions in the tax base. This is possible through the collection of the so-called flat-rate tax, which is a federal tax that keeps the marginal rate constant and this happens when the tax amount is determined as a certain guarantee, regardless of calculation.