Answer:
A. Taxable income =$63,750
Income tax = $8,925
Average rate=9%
MARGINAL RATE 14%
B. Taxable income= $12,900
Income tax =$1,806
Average rate =3.8%
MARGINAL RATE 14%
C. Zero
D. PROGRESSIVES RATE STRUCTURE
Explanation:
a. Computation for income tax, average , and marginal tax.
Computation for Mr. Hill's taxable income
Taxable income =($98,750 -$35,000)
Taxable income =$63,750
Computation for Mr. Hill's income tax
Income tax=($63,750 ×14%)
Income tax = $8,925
Computation for Mr. Hill's average rate Average rate= ($8,925 ÷$98,750)
Average rate=9%
Based on the information given we were told they levies a flat 14% tax which means that the
MARGINAL RATE will be 14%.
B. Computation for Ms. Lui income, average , and marginal tax.
Taxable income=
($47,900 -$35,000)
Taxable income= $12,900
Income tax = ($12,900 ×14%)
Income tax =$1,806
Average rate = ($1,806 ÷$47,900)
Average rate =3.8%
Based on the information given we were told they levies a flat 14% tax which means that the
MARGINAL RATE will be 14%
C. Based on the information given about Ms. Archer's we were told that she earned the amount of $34,100 as income this year in which she as well paid no income tax which means that her average and marginal rates will be Zero (0).
d. Based on the information given a bit Jurisdiction X we can tend to say that Jurisdiction X make use of PROGRESSIVES RATE STRUCTURE reason been that the Jurisdiction X average rate will continue to increase as the individual income increases.
