Statement I: We could make the Social Security tax less regressive by lowering the wage-base limitation to $25,000.
Statement II: The highest marginal tax rate on the federal personal income tax is 31 percent.

A) Statement I is true and statement II is false.
B) Statement II is true and statement I is false.
C) Both statements are true.
D) Both statements are false.

Social Security Tax

A tax imposed on both employers and employees used to fund the Social Security program, which provides retirement, disability, and survivorship benefits.

Wage-Base Limitation

A wage-base limitation refers to the maximum amount of earnings that is taxed for certain social services, such as Social Security, beyond which earnings are no longer subject to the tax.

Regressive

A term typically used to describe a tax system where the tax rate decreases as the taxable amount increases, placing a heavier burden on lower-income individuals.