Under Which Taxation Principle Does the Percentage of Income Paid

question 184

Multiple Choice

Under which taxation principle does the percentage of income paid in taxes increases as income increases?

• A)The ability-to-pay principle
• B)The progressive tax principle
• C)The proportional tax principle
• D)The regressive tax principle
• E)The benefits-received principle.

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Definitions:

Profit Margin

A financial metric expressed as a percentage that measures the amount of net income earned with each dollar of sales by comparing the net income and the revenue.

Greatest Source of Funds

Typically refers to the primary means or largest contributor of operational or investment capital within an organization or economy.

Sale of Inventory

The process of selling the goods that a company manufactures or purchases to sell in the normal course of doing business.

Increase in Long-term Debt

An increase in long-term debt indicates a company has borrowed more funds that are due for repayment beyond the next twelve months.