A Tax Is Regressive If It

question 206

Multiple Choice

A tax is regressive if it

• A) takes a higher percentage of income as income increases.
• B) takes the same percentage of income regardless of income level.
• C) takes a smaller percentage of income as income increases.
• D) is levied on consumers.

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Definitions:

Proportionate Consolidation Method

A method of accounting where a parent entity combines its share of the subsidiary's assets, liabilities, incomes, and expenses line by line into its financial statements.

Non-Controlling Interest (NCI)

A portion of the equity in a subsidiary not attributable, directly or indirectly, to a parent company, reflecting the minority shareholders' stake.

Consolidated Balance Sheet

A financial statement that presents the assets, liabilities, and shareholders' equity of a parent company and its subsidiaries as a single entity.

Consolidated Retained Earnings

The portion of earnings not distributed as dividends to shareholders and consolidated from both the parent company and its subsidiaries.