Use the Following Information as of December 31 to Determine

question 258

Multiple Choice

Use the following information as of December 31 to determine equity.

• A)$1,000
• B)$3,000
• C)$5,000
• D)$10,000
• E)$11,000

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Definitions:

Progressive Tax

A tax system in which the tax rate increases as the taxable amount increases, placing a higher tax burden on wealthier individuals.

Proportional Tax

A tax system where the tax rate remains constant regardless of the amount subject to taxation, meaning that taxpayers pay the same percentage of their income in taxes regardless of how much they earn.

Regressive Tax

A tax that takes a larger percentage of income from low-income earners than from high-income earners, essentially burdening the poor more than the rich.

Proportional Tax

A proportional tax is a tax system where the tax rate remains constant regardless of the amount subject to taxation, meaning individuals pay the same percentage of their income regardless of income level.