Question

Delux​ Corporation, a retail sales​ corporation, has a taxable income of​ $500,000. Delux​ Corporation's regular tax liability is A. ​$158,250. B. ​$175,000. C. ​$105,000. D. ​$162,200.

Answer 1

Delux​ Corporation's regular tax liability is:

C. ​$105,000.

Step-by-step explanation:

Effective 2018, the new corporate tax rate is 21%. It was cut from 35% previously to 21%. Therefore, calculating the tax liability of Delux Corporation, the taxable income will yield C.'s $105,000 (21% of $500,000). Before 2018, the tax liability would have been B.'s $175,000. This is a reduction of $70,000, which the government lost in taxes to enable businesses to make investments for economic growth.