Multiple Choice
Which one of the following best describes the primary intent of the Sarbanes-Oxley Act of 2002?
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6. Internal Controls and Reporting Cash
Sarbanes-Oxley Act
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Which of the following taxes specifically targeted excess profits earned by oil companies?
A
Excise Tax
B
Corporate Income Tax
C
Windfall Profits Tax
D
Alternative Minimum Tax
Verified step by step guidance1
Understand the concept of the Windfall Profits Tax: This tax is specifically designed to target excess profits earned by companies, often in industries experiencing sudden and extraordinary profitability, such as oil companies during periods of high oil prices.
Differentiate between the listed taxes: Excise Tax is typically levied on specific goods or services, Corporate Income Tax is a general tax on a corporation's profits, and Alternative Minimum Tax ensures that corporations pay a minimum amount of tax regardless of deductions.
Recognize that the Windfall Profits Tax is unique in its focus on excess profits, particularly in industries like oil, where sudden price surges can lead to extraordinary gains.
Relate the Windfall Profits Tax to its purpose: It aims to redistribute excessive earnings and prevent companies from disproportionately benefiting from external factors like geopolitical events or market disruptions.
Conclude that among the options provided, the Windfall Profits Tax is the correct answer as it specifically targets excess profits earned by oil companies.
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