Excluding any legislated changes in statutory tax rates, for which tax base would one expect the greatest revenue increase from a given increase in state economic activity?
A) General sales tax
B) Real property taxes
C) Motor fuel taxes
D) Personal income taxes

Question

Quizplus · Accepted Answer

Personal income taxes are likely to see the greatest revenue increase from a given increase in state economic activity because as economic activity increases, employment and wages typically rise, leading to higher personal incomes and, consequently, higher income tax revenues.

Excluding Any Legislated Changes in Statutory Tax Rates, for Which