whats the right answer
How are businesses taxed with the corporate income tax?(1 point)
Responses
All businesses pay the same amount of tax each year.
All businesses pay the same amount of tax each year.
Businesses pay a progressive tax based on their total expenses.
Businesses pay a progressive tax based on their total expenses.
Businesses pay a proportional tax based on their total receipts.
Businesses pay a proportional tax based on their total receipts.
Businesses pay a proportional or progressive tax based on their profits.
The correct answer is: Businesses pay a proportional or progressive tax based on their profits.
The right answer is "Businesses pay a proportional or progressive tax based on their profits." To understand how businesses are taxed with the corporate income tax, let's break down the options:
1. "All businesses pay the same amount of tax each year" is incorrect. The corporate income tax is based on the profits of a business, so the tax amount will vary depending on the company's earnings.
2. "Businesses pay a progressive tax based on their total expenses" is incorrect. The tax is typically based on profits, not expenses. Progressive taxes increase as the profits increase, so this option is not accurate.
3. "Businesses pay a proportional tax based on their total receipts" is incorrect. While individual income tax can be based on total receipts, corporate income tax is typically based on profits.
4. "Businesses pay a proportional or progressive tax based on their profits" is the correct answer. Proportional tax means that businesses pay a fixed percentage of their profits in taxes. Alternatively, a progressive tax system might apply different tax rates to different levels of profits, with higher profits taxed at higher rates.
To summarize, businesses are taxed with the corporate income tax based on their profits, either through a proportional tax system or a progressive tax system.