ECONOMICS
INCOME DISTRIBUTION
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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TRUE
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FALSE
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Either A or B
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None of the above
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Detailed explanation-1: -The top 10 percent of earners paid 74 percent of all income taxes and the top 25 percent paid 89 percent. Altogether, the top fifty percent of filers earned 89 percent of all income and were responsible for 97.7 percent of all income taxes paid in 2020.
Detailed explanation-2: -The average income tax rate in 2020 was 13.6 percent. The top 1 percent of taxpayers paid a 25.99 percent average rate, more than eight times higher than the 3.1 percent average rate paid by the bottom half of taxpayers.
Detailed explanation-3: -Same is the case of income tax which is charged against the income of a person. People with higher income would be required to pay more taxes. Since they are incurring more income, they have the ability to pay more taxes. Thus the rich are taxed more and the poor taxed less.
Detailed explanation-4: -The ability-to-pay principle holds that those who have a greater ability to pay taxes-measured by income and wealth-should pay more.