Identify the incorrect statement regarding Georgia's revenue in 2016 based on a pie...
Check the final answer first, then review the worked steps.
Problem
Identify the incorrect statement regarding Georgia's revenue in 2016 based on a pie chart.
Answer
D
Step-by-step solution
- Analyze the Pie Chart: The pie chart displays Georgia's revenue sources in 2016. The largest portion, 45%, comes from "Individual Income Tax." Other significant sources include "Sales Tax" (26%), "Corporate Income Tax" (6%), "Motor Fuel" (4%), "Tobacco & Alcohol" (2%), "Motor Vehicle License" (4%), "Ad Valorem" (2%), "Interest, Fees" (4%), "Lottery Funds" (3%), and "Other" (4%).
- Evaluate Statement A: "Most of Georgia's revenue came from taxes." The sum of all tax categories (Individual Income Tax, Sales Tax, Corporate Income Tax, Motor Fuel, Tobacco & Alcohol, Motor Vehicle License, Ad Valorem) is $45\% + 26\% + 6\% + 4\% + 2\% + 4\% + 2\% = 89\%$. Since 89% is a majority, this statement is likely correct.
- Evaluate Statement B: "Middle school students would be MOST likely to contribute to the category that is responsible for 26% of the state's income." The category responsible for 26% of the state's income is "Sales Tax." Middle school students, while they may make some purchases, are not typically the primary contributors to sales tax revenue compared to the general adult population. However, the statement asks who would be most likely to contribute to this category, and sales tax is a broad category that includes purchases made by everyone, including middle school students. This statement is plausible as sales tax is a common revenue source for all consumers.
- Evaluate Statement C: "People who work are responsible for most of the revenue collected by the state." People who work are the primary payers of "Individual Income Tax" (45%) and "Corporate Income Tax" (6%), and also contribute to "Sales Tax" through their purchases. These categories alone account for $45\% + 6\% + 26\% = 77\%$ of the revenue. Therefore, people who work are indeed responsible for a significant majority of the state's revenue. This statement is likely correct.
- Evaluate Statement D: "People who own property do not have to pay taxes." The pie chart does not explicitly list "Property Tax" as a revenue source. However, it does list "Ad Valorem" at 2%. Ad Valorem taxes are typically property taxes. Even if "Ad Valorem" does not represent all property taxes, the statement claims that property owners do not have to pay taxes. This is a strong claim. In many jurisdictions, property ownership is directly linked to property taxes. The presence of "Ad Valorem" suggests that some form of property-related tax is collected. Therefore, the statement that property owners do not have to pay taxes is likely incorrect, as property taxes are a common form of taxation for property owners.
- Identify the Incorrect Statement: Based on the analysis, statement D is the most likely to be incorrect because property taxes (often referred to as Ad Valorem taxes) are a common form of revenue for states and municipalities, and the chart shows "Ad Valorem" as a revenue source. Therefore, property owners generally do pay taxes.