Fact1: Over the past eight years , cuts in federal income tax
rates have resulted in US taxpayers paying a smaller proportion of
their incomes as federal taxes.
Fact2: OVer the past eight years , US taxpayers have paid a larger
proportion of their incomes as state and local taxes.
Fact1 would most likely contribute to an explanation of Fact2 if
which of the following were true?
a. An increased demand in the number and quality of services provided
by state an local authorities has occured in the last eight years.
b. Lower federal income taxes have increased the amount of money in
the economy available for discretionary spending.
c. Over the past years, a large number of states have instituted
state income taxes, in addition to the more common property and sales
d. Cuts in the federal income tax were made possible by ending or
downsizing many federal programs.
e. Cuts in the federal income tax were made possible by shifting the
costs of some programs to state and local authorities.
Why not C?