A Level History - America - Practice Exam

What was the outcome of the Revenue Act of 1932?

1. Increased income tax to 63%

2. Reduced corporate taxation

3. Eliminated income tax for the wealthy

4. Provided direct payments to veterans

The correct answer is: Increased income tax to 63%

The Revenue Act of 1932 significantly increased the income tax rates, raising the top rate to 63%. This was a measure taken during the Great Depression as the government sought to generate additional revenue to address the increasing budget deficit and the demands for government expenditure. The Act aimed to collect more taxes from wealthier individuals in an attempt to improve the economic situation of the country, reflecting a shift toward more progressive taxation during a time of economic hardship. This increase was part of a broader strategy to reform taxation amidst a backdrop of a struggling economy, which contrasted sharply with the previous policies that favored lower taxes for corporations and wealthier individuals. The other outcomes presented in the options are not aligned with the provisions of the Revenue Act of 1932, as it did not reduce corporate taxation, eliminate income tax for the wealthy, or provide direct payments to veterans. Rather, it sought to extract higher contributions from those who were able to contribute more, thus reflecting the economic realities of the era.