Which statement best describes the overall tax and transfer systems of the United States?
A) Our tax system makes the after-tax distribution of income much more equal than the before-tax distribution.
B) Our tax system does not by itself reallocate income; transfer payments help redistribute income from rich to poor.
C) Although some federal taxes are progressive, this effect is more than offset by the regressivity of state and local taxes, which make the overall system extremely regressive.
D) Recent changes in corporate income taxes and payroll taxes have made our overall tax system more progressive.
Correct Answer:
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