What is the difference between an income tax and a payroll tax?
A. Income taxes reduce the demand for harmful goods while payroll taxes don’t affect this demand.
B. Income taxes are collected based on income while payroll taxes are collected based on wealth.
C. Income taxes are used for a wide variety of government activities while payroll taxes pay for specific programs.
D. Income taxes increase the purchasing power of the government while payroll taxes increase the purchasing power of workers.
C. Income taxes are used for a wide variety of government activities while payroll taxes pay for specific programs.