I. What general observations can be made regarding tax systems in general and the Rodosian tax code? A. In general, there are three different types of tax systems: progressive, regressive, and flat tax systems. The existing Rodosian system imposed on individual (personal) taxpayers is an example of a regressive system. One benefit of the existing system is that it increases the kingdom's tax base because every citizen pays taxes; as a result, every taxpayer should care about how King Valdimar spends his tax revenue. However, as the wealth or income of an individual taxpayer decreases, the proportion of his or her income or wealth spent on taxes B. In contrast, the existing system imposed on businesses is an example of a organizations-regardless of income or asset holdings-pay the same flat system. A benefit of this arrangement is that all business tax rate II. How does the current tax system affect the decisions, behaviors, and condition of an individual Rodosian citizen and/or business? A. In general, taxes are classified asan expenseand_decrease both an individual's disposable income and a business's after-tax profits. B. An advantage of the existin income increases. The requirement of a constant annual tax payment of SR1,800 means that as his or her annual income increases from SR18,000 per year to SR42,000, the proportion of his or her income lost to taxes decreases from be expected to encourage the average individual Rodosian to improve his or her income and quality of life. C.A second advantage of Rodos's existing personal tax arrangement is its implicity which makes it less expensive to comply with the requirement. Everything else being equal, this characteristic tends to D. Similarly, an advantage of the current business tax requirement is that it is identical for all business organizations. However, in this case, it is the tax rate, rather than the tax liability, that is the same for all taxpayers. According to this arrangement, a business organization will be able to retain every pre-tax sodor earned. From these after-tax profits, it will then pay any shareholders. Given these provisions, the current system does not encourage the use of one form of financing (debt versus equity) over the other. This is because the arrangement allows for the tax deductibility of g personal tax requirement is that it allows an individual Rodosian to keepmore of his or her income as his or her total to . In general, this type of tax arrangement should a citizen's disposable income. for owed on its borrowed capital and any to its only a business's e financing