Quiz: The Economy and the Tax Gap in the United States
- <p>
A. 30%<br />
B. 27%<br />
C. 19%<br />
D. 13.9%</p>
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Answer: C. Thanks in large part to the exceedingly generous 15% capital gains and dividend taxes, most of the super-rich pay a lower tax rate than middle-class filers making $69,001 per year.<br />
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<a href="http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=456" target="_blank">Citation</a></p>
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A. The top 1%<br />
B. The Bottom 20%</p>
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Answer: B. Taxpayers in the bottom 20% pay, on average, 8.8% of their income into Social Security. Those at the top pay, on average 1.6% of their income into Social Security.<br />
<br />
<a href="http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=456" target="_blank">Citation</a></p>
- <p>
A. The top 1%<br />
B. The bottom 20%</p>
- <p>
Answer: B. Depending on the state, the bottom 20% of earners pay between 6.7 and 1.1 times as much of their paycheck in state taxes.<br />
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<a href="http://www.dailyfinance.com/2012/02/13/how-state-taxes-put-a-bigger-pinch-on-the-poor/" target="_blank">Citation</a></p>
- <p>
A. 28%<br />
B. 50%<br />
C. 62%<br />
D. 71%</p>
- <p>
Answer: B. While he has become the patron saint of tax cutters, for most of Ronald Reagan's presidency, the top tax rate was much higher than it is today.<br />
<br />
<a href="http://www.taxfoundation.org/taxdata/show/151.html" target="_blank">Citation</a></p>
- <p>
A. 50%<br />
B. 41%<br />
C. 70%<br />
D. 91%</p>
- <p>
Answer: C. Under President Nixon, there were also up to 33 tax brackets. Today, there are six.<br />
<br />
<a href="http://www.taxfoundation.org/taxdata/show/151.html" target="_blank">Citation</a></p>
- <p>
A. 27%<br />
B. 39%<br />
C. 73%<br />
D. 91%</p>
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Answer: D. The first big drop in the top tax bracket -- to 77% -- happened under John F. Kennedy.<br />
<br />
<a href="http://www.taxfoundation.org/taxdata/show/151.html" target="_blank">Citation</a></p>
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A. $50,000<br />
B. $375,000<br />
C. $5.12 million<br />
D. $10 million</p>
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Answer: C. In 2001, the estate tax exemption topped out at $675,000, and the top rate was 55%. Today, the exemption is $5.12 million, and the top rate is 35%. Side note: $5.12 million represents the average yearly earnings of over 103 households – none of whom would get a 100% exemption on their taxes.<br />
<br />
<a href="http://www.bankrate.com/finance/taxes/shielding-assets-estate-taxes-1.aspx" target="_blank">Citation</a></p>
- <p>
A. 27.3%<br />
B. 49.3%<br />
C. 37.8%<br />
D. 51.7%</p>
- <p>
Answer: B. The period right before the Great Depression witnessed one of the biggest income distribution gaps in U.S. history.<br />
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<a href="http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cts=1331072786229&ved=0CCgQFjAA&url=http%3A%2F%2Felsa.berkeley.edu%2F%7Esaez%2Fpikettyqje.pdf&ei=A49WT6DSJInL0QGboqSOCg&usg=AFQjCNHnQcDUyBSMFC9RPENR7DrTqt3-Wg&sig2=zmMvwpT1IDnTP2V8Xoxw8Q" target="_blank">Citation</a></p>
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A. 25.3%<br />
B. 32.3%<br />
C. 41.7%<br />
D. 50.3%</p>
- <p>
Answer: B. In the 1950's, America's thriving middle class was flush with cash. Their free spending further increased employment, creating a virtuous economic cycle.<br />
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<a href="http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cts=1331072786229&ved=0CCgQFjAA&url=http%3A%2F%2Felsa.berkeley.edu%2F%7Esaez%2Fpikettyqje.pdf&ei=A49WT6DSJInL0QGboqSOCg&usg=AFQjCNHnQcDUyBSMFC9RPENR7DrTqt3-Wg&sig2=zmMvwpT1IDnTP2V8Xoxw8Q">Citation </a></p>
- <p>
A. 21.2%<br />
B. 30.7%<br />
C. 37.5%<br />
D. 49.7%</p>
- <p>
Answer: D. In other words, income distribution in the U.S. today is more unbalanced than it was before the Great Depression.<br />
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<a href="http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cts=1331072786229&ved=0CCgQFjAA&url=http%3A%2F%2Felsa.berkeley.edu%2F%7Esaez%2Fpikettyqje.pdf&ei=A49WT6DSJInL0QGboqSOCg&usg=AFQjCNHnQcDUyBSMFC9RPENR7DrTqt3-Wg&sig2=zmMvwpT1IDnTP2V8Xoxw8Q" target="_blank">Citation </a></p>
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