Which of the Following Would Indicate That an Income Tax

question 176

Multiple Choice

Which of the following would indicate that an income tax is progressive?

• A)high-income people pay $3, 000; low-income people pay $1, 000
• B)low-income people pay $3, 000; high-income people pay $1, 000
• C)high-income and low-income people all pay $1000 each
• D)high-income people pay 20 percent of their income in taxes; low-income people pay 10 percent
• E)both high-income and low-income people pay 10 percent of their income in taxes

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Definitions:

Injured Third Party

An individual or entity that suffers harm or damage due to the actions or the contractual relationship between two other parties.

Partnership

A legal form of business operation between two or more individuals who share management and profits.

Limited Liability

A legal structure that limits the financial responsibility of owners or shareholders to their investment in a company, protecting personal assets from business debts.

Carrying on Business

The act of engaging in commercial activities with a degree of continuity and organization, aiming at producing income or profit.