A city government imposes a proportional income tax on all people who earn income within its city limits. In? 2004, the? city's income tax rate was 0.04 ?(4 ?percent), and it collected ?$20.00 million in income taxes. In? 2005, it raised the income tax rate to 0.05 ?(5 ?percent), and its income tax collections declined to ?$19.20 million. What happened to the? city's income tax base between 2004 and? 2005? What would cause a fall in the tax? base?

A.It cannot be determined since the tax rate changed.

B. It rose by ?$116 million.

C. It fell by  $0.800.80 million.

D. It fell by $116 million.

A. Incomes of city residents fell.

B.The number of residents earning income fell.

C.Either of the above.

1. (D) It fell by $116 million

2. (C) Either of the above.