AP Macroeconomics : How to find tax credits
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Example Questions
Example Question #2 : Tax Policy
A tax credit describes an element of tax policy that ________.
Possible Answers:
raises money on investment income
only allows exemptions for people making under a certain income level per year
reduces taxes for people who qualify under certain circumstances
allows for an additional tax on specific kinds of income, such as gambling
allows for an additional tax on goods deemed unseemly
Correct answer:
reduces taxes for people who qualify under certain circumstances
Explanation:
Tax law includes small exemptions and refunds, which are known as tax credits. Often, these tax credits are provided for groups of people like homebuyers, parents, and students. Tax credits are also usually seen as a way to lighten specific tax burdens without rewriting or transforming tax policy.
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