Suppose Taxes Are Levied in the Following Way

question 46

Multiple Choice

Suppose taxes are levied in the following way. All individuals pay a tax equal to $2000 no matter what income they earn. In addition, all individuals pay 20 percent of all their earned income in taxes. This income- tax system is

• A) regressive.
• B) an accurate description of the Canadian system.
• C) proportional.
• D) indexed.
• E) progressive.

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Definitions:

Internal Control

Procedures and policies implemented by a company to safeguard its assets, ensure financial accuracy, and promote operational efficiency.

Canceled Checks

Checks that have been paid and processed by a bank, no longer negotiable, serving as proof of payment.

Negotiable

Capable of being transferred or exchanged with ease, often referring to financial instruments.

Internal Control System

Procedures and policies implemented by a company to ensure the integrity of financial and accounting information, promote accountability, and prevent fraud.