Indicate which of the following statements concerning the following tax rate structures is/are correct.
?
?
$\begin{array}{lcc}
& \text { When Income } & \text { Total Tax } \
&\text { Equals } &\text { Equals } \
\text { Structure \#1 } & 10,000 & 750 \
& 100,000 & 6,000 \
& & \
\text { Structure \#2 } & 15,000 & 900 \
& 75,000 & 4,000 \
& & \
\text { Structure \#3 } & 13,000 & 1,200 \
& 86,000 & 9,600
\end{array}$
I.Tax Structure #1 is regressive.
II.Tax Structure #1 is proportional
III.Tax Structure #2 is progressive.
IV.Tax Structure #3 is progressive
?

Question

Indicate which of the following statements concerning the following tax rate structures is/are correct.
?
?
$\begin{array}{lcc}
& \text { When Income } & \text { Total Tax } \
&\text { Equals } &\text { Equals }  \
\text { Structure \#1 } & 10,000 & 750 \
& 100,000 & 6,000 \
& & \
\text { Structure \#2 } & 15,000 & 900 \
& 75,000 & 4,000 \
& & \
\text { Structure \#3 } & 13,000 & 1,200 \
& 86,000 & 9,600
\end{array}$
I.Tax Structure #1 is regressive.
II.Tax Structure #1 is proportional
III.Tax Structure #2 is progressive.
IV.Tax Structure #3 is progressive
?

Quizplus · Accepted Answer

Tax Structure #1 is regressive because the tax rate decreases as the taxable income increases. Tax Structure #2 is not mentioned, so we cannot determine if statement III is correct. Tax Structure #3 is mentioned and is stated to be progressive, with the tax rate increasing as the taxable income increases. Therefore, statement IV is correct. Statement II must be incorrect as Tax Structure #1 is already stated to be regressive, so it cannot also be proportional. Thus, statements I and IV are correct, making option C the best choice.

Indicate Which of the Following Statements Concerning the Following Tax