Which of the following correctly explains how local and state governments can directly tax individuals without directly taxing their income?

Question

A) State and local governments can charge fees to people for using certain government services.
B) State and local governments can charge individuals for tuition to attend a state college or university.
C) State and local governments can tax individuals' real and personal property.
D) State and local governments can tax a person's annual wages or salaries.

Answer 1

The correct explanation for how local and state governments can directly tax individuals without directly taxing their income is:

C) State and local governments can tax individuals' real and personal property.

This option correctly indicates that property taxes are a means by which local and state governments can generate revenue from individuals without taxing their income directly. Options A and B refer to fees and charges for services, which are not taxes, while option D refers to directly taxing income, which is not consistent with the question.