Between 1977 and 1989, the percentage of income paid to Federal taxes by the richest one percent of Americans decreased, from 40 percent to 25 percent. By the end of that same period, however, the richest one percent of Americans were paying a larger proportion of all Federal tax revenues, from 12.7 percent in 1977 to 16.2 percent in 1989.
Which of the following, if true, contributes most to an explanation of the discrepancy described above?
A.Between 1977 and 1989, the Internal Revenue Service increased the percentage of its staff members responsible for audits and tax collection.
B.Between 1977 and 1989, the before-tax income of the richest one percent of Americans increased by over 75 percent when adjusted for inflation.
C.Between 1977 and 1989, many of the richest one percent of Americans shifted their investments from untaxable to taxable assets.
D.Between 1977 and 1989, the top tax rate was reduced from 70 percent to 31 percent and several tax loopholes were eliminated.
E.Between 1977 and 1989, the amount of Federal taxes paid by the richest one percent of Americans increased by $45 billion, while the amount paid by all Americans rose by $50 billion.
It was on Kaplan CAT. The answer is B. I still don't understand about B. Does inflation have something to with Federal tax here? I am confused about "paid to federal tax" and "federal tax revenue". "Paid to federal tax" is by richest one person and "federal tax revenue" is by IRS? Please help..
Which of the following, if true, contributes most to an explanation of the discrepancy described above?
A.Between 1977 and 1989, the Internal Revenue Service increased the percentage of its staff members responsible for audits and tax collection.
B.Between 1977 and 1989, the before-tax income of the richest one percent of Americans increased by over 75 percent when adjusted for inflation.
C.Between 1977 and 1989, many of the richest one percent of Americans shifted their investments from untaxable to taxable assets.
D.Between 1977 and 1989, the top tax rate was reduced from 70 percent to 31 percent and several tax loopholes were eliminated.
E.Between 1977 and 1989, the amount of Federal taxes paid by the richest one percent of Americans increased by $45 billion, while the amount paid by all Americans rose by $50 billion.
It was on Kaplan CAT. The answer is B. I still don't understand about B. Does inflation have something to with Federal tax here? I am confused about "paid to federal tax" and "federal tax revenue". "Paid to federal tax" is by richest one person and "federal tax revenue" is by IRS? Please help..
