Asked by Princess Lockett on Jun 04, 2024
Verified
Statement I: The federal corporate income tax is a direct tax.
Statement II: The Social Security tax is a regressive tax.
A) Statement I is true and statement II is false.
B) Statement II is true and statement I is false.
C) Both statements are true.
D) Both statements are false.
Corporate Income Tax
A tax imposed on the net income (profit) of corporations, calculated as a percentage of their net income.
Social Security Tax
is a tax levied on both employers and employees to fund the Social Security program, which provides benefits to retirees, disabled individuals, and survivors.
Regressive Tax
Falls more heavily on the poor than on the rich; for example, Social Security tax.
- Apprehend the construct and significance of assorted taxes, like corporate income tax, excise taxes, and Social Security tax.
- Discern the concepts of progressive, proportional, and regressive taxation and their enactment in various tax scenarios.
- Contrast direct taxes with indirect taxes and explore their consequences for taxpayers.
Verified Answer
JH
Jenny HeckmanJun 07, 2024
Final Answer :
C
Explanation :
Statement I is true because the federal corporate income tax is levied directly on the income of corporations, making it a direct tax. Statement II is true because the Social Security tax is considered regressive; it takes a larger percentage of income from low-income earners than from high-income earners, due to the income cap on which the tax is levied.
Learning Objectives
- Apprehend the construct and significance of assorted taxes, like corporate income tax, excise taxes, and Social Security tax.
- Discern the concepts of progressive, proportional, and regressive taxation and their enactment in various tax scenarios.
- Contrast direct taxes with indirect taxes and explore their consequences for taxpayers.