The sheaf of papers accompanying the journal describes several potential revisions to the Rodosian personal and business tax code, including replacing the existing system with a progressive tax system, the assessment of different luxury and sin taxes, and/or modifications of the provisions of the current system. Two of the specific proposals include the following:

Policy 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 SR10,000,000	SR0		8%
SR10,000,000SR25,000,000	SR800,000		16%
SR25,000,000SR60,000,000	SR3,200,000		24%
SR60,000,000SR90,000,000	SR11,600,000		32%
SROver 90,000,000	SR21,200,000		40%
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 SR16,000	SR0		9%
SR16,000SR38,000	SR1,440		20%
SR38,000SR75,000	SR5,840		30%
SROver 75,000	SR16,940		40%

Given these tax schedules, calculate the tax liabilities for:

	Dekk Wheelwright Company, which earns an income of SR65,000,000
	The following three individual taxpayers: (1) Daggar, a farmer earning SR18,000 per year; (2) Birna, a teacher earning SR42,000 per year; (3) Kolli, a merchant earning SR87,000 per year

Note: Round your average tax rate answers to two decimal places.

Taxpayer	Tax Obligation	Average Tax Rate
Dekk Wheelwright	SR	%
Daggar	SR	%
Birna	SR	%
Kolli	SR	%

3) If you were the owner or manager of a Rodosian business, such as Dekk Wheelwright, would you prefer the existing tax system or the progressive tax system? Why?

1. The progressive tax system, because the firms tax obligation would be greater than that incurred under the existing system. This would reduce the profit available to the firm and its shareholders.

1. The existing tax system, because my tax obligation would be less than that incurred under the progressive system. This would increase the amount of funds available to the firms shareholders.

1. The existing tax system, because my tax obligation would be greater than that incurred under the progressive system. This would reduce the profit available to the firm and its shareholders.

Policy Proposal 2: Impose a 50% tax increase on individual and business taxpayers to pay for a proposed expansion and improvement of the kingdoms port facilities. It is anticipated that the project will increase trade with nearby islands and thereby increase employment and profits in Rodos.

4) What effect will this tax have on Dekk Wheelwright and individual Rodosians?

1. This tax will increase the tax revenues received by Treasury of Rodos.

1. All other things equal, this tax will increase the disposable income of both Rodosian citizens and businesses, making it easier for businesses to invest in the equipment and personnel necessary to participate in any increased interisland trade.

1. All other things equal, this tax will reduce the disposable income of both Rodosian citizens and businesses, making it more difficult for businesses to invest in the equipment and personnel necessary to participate in any increased interisland trade.