Question

The basic formula for any tax is:

1) Tax base - Tax rate = Tax liability.
2) Tax base × Tax rate = Tax liability.
3) Tax base × Tax liability = Tax rate.
4) Tax base + Tax rate = Tax liability.
5) Tax base ÷ Tax rate = Tax liability.

Answer 1

The correct answer is option 2) Tax base × Tax rate = Tax liability. The basic formula for any tax is to multiply the tax base by the tax rate to calculate the tax liability.

Step-by-step explanation:

The correct answer is option 2) Tax base × Tax rate = Tax liability.

The basic formula for any tax is to multiply the tax base by the tax rate to calculate the tax liability. The tax base refers to the amount or value on which the tax is levied, such as the income earned or the price of a product. The tax rate is the percentage at which the tax is imposed. By multiplying the tax base by the tax rate, we can determine the tax liability, which is the amount of tax to be paid.

For example, if the tax base is $100 and the tax rate is 10%, the tax liability would be $100 × 0.10 = $10.