The Mythical Country of Woodland Imposes Two Taxes:
Worker Tax

The mythical country of Woodland imposes two taxes:
Worker tax: Employers withhold ten percent of all wages and salaries.If taxable income as reported on the employee's income tax return is greater than $40,000,an additional 5% tax is levied on all income.
Business tax: All businesses pay a tax on invested capital based on a valuation formula.The tax computed for three different amounts of invested capital is provided below:
$$\begin{array} { c c } \text { Invested Capital } & \text { Tax } \\\$ 100,000 & \$ 12,000 \\\$ 200,000 & \$ 16,000 \\\$ 300,000 & \$ 20,000\end{array}$$
According to the definitions in the text:
I.The worker tax is a regressive tax rate structure.
II.The business tax is a progressive tax rate structure.
III.The worker tax is a progressive tax rate structure.
IV.The business tax is a regressive tax rate structure.

A) Statements I and III are correct.
B) Statements II and III are correct.
C) Only statements III is correct.
D) Statements I and IV are correct.
E) Statements III and IV are correct.