Question
olicy Proposal 1: Replace the existing system with a progressive tax system that would tax business and individuals, using these schedules: Business Tax Rates If
olicy Proposal 1: Replace the existing system with a progressive tax system that would tax business and individuals, using these schedules:
Business Tax Rates | |||
---|---|---|---|
If your Taxable Income Is | You Pay This Amount on the Base of the Bracket | Plus This Percentage on the Excess over the Base | |
Up to SR8,000,000 | SR0 | 12% | |
SR8,000,000SR15,000,000 | SR960,000 | 18% | |
SR15,000,000SR31,000,000 | SR2,220,000 | 24% | |
SR31,000,000SR47,000,000 | SR6,060,000 | 30% | |
SROver 47,000,000 | SR10,860,000 | 36% | |
Personal Tax Rates | |||
If your Taxable Income Is | You Pay This Amount on the Base of the Bracket | Plus This Percentage on the Excess over the Base | |
Up to SR8,000 | SR0 | 6% | |
SR8,000SR28,000 | SR480 | 10% | |
SR28,000SR62,000 | SR2,480 | 16% | |
SROver 62,000 | SR7,920 | 25% |
Given these tax schedules, calculate the tax liabilities for:
Ferskt Fishmongers Company, which earns an income of SR35,000,000 | |
The following three individual taxpayers: (1) Bjork, a baker earning SR24,000 per year; (2) Frida, a farmer earning SR54,000 per year; (3) Ari, a banker earning SR96,000 per year |
Note: Round your average tax rate answers to two decimal places.
Taxpayer | Tax Obligation | Average Tax Rate |
---|---|---|
Ferskt Fishmongers | SR
| % |
Bjork | SR
| % |
Frida | SR
| % |
Ari | SR
| % |
If you were a Rodosian taxpayer, such as Bjork, Frida, or Ari, would you prefer the existing tax system or the progressive tax system? Why?
(T or F) The progressive tax system, because my tax obligation would be significantly greater than that incurred under the existing system. This would reduce my disposable income.
(T or F) The existing tax system, because my tax obligation would be greater than that incurred under the progressive system. This would reduce my disposable income.
(T or F) The existing tax system, because my tax obligation would be significantly less than that under the progressive system. This would increase my disposable income.
Policy Proposal 2: Assess a special tax on businesses that own more than 10 horses or oxen.
What effect will this tax have on Rodosian businesses?
(T or F) This is an example of a sin tax.
(T or F) The tax will not affect the businesses being assessed the tax or the Treasurys tax revenues.
(T or F) This tax on more than 10 horses or oxen has the potential to penalize businesses from growing beyond a certain level. This will reduce the Treasurys tax revenues and potentially limit the growth potential and sales of businesses that provide goods and services to the taxpayers being assessed.
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