The 21% of taxes and annual percentage decrease of 0.32, using arithmetic progression gives;
- The year corporations will pay zero taxes as 2025
The percentage of tax that comes from corporate income tax = 21%
Amount by which the percentage decreased each year = 0.32
Period during which the tax reduced = Between 1960 and 2010
Required;
The year corporations pay zero taxes.
Solution;
The amount of tax paid each year can be given by the arithmetic progression formula,
Where;
a = The first term = 21
d = The common difference = -0.32
When , we have;
0.32•(n - 1) = 21
n - 1 = 21/0.32 = 65.625
n = 65.625 - 1 = 64.625 ≈ 65
The year the corporations will pay no taxes is 1960 + 65 = 2025
Corporations will pay no taxes in the year 2025
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