Question

Seb's salary is $X per annum. The tax system is such that Seb pays a 15% flat rate of income tax on his salary. The tax system is due for reform, and politicians have suggested the following:
1. Any income under $12,000 should be tax free.
2. Anything above $12,000 should be taxed at 25%.
Given that Seb will be paying $1,500 more under the new system, calculate how much tax Seb pays under the current system. You can assume that X>$12,000.

Answer 1

Answer:

Seb pays $3750 tax amount under the current system.

Step-by-step explanation:

In the previous system, the tax charge was 15% flat.

So, if the salary of Seb is $x per annum, then the tax amount was $\frac{x \times 15}{100} = 0.15x$.

Again, in the current system, the tax charge is 25% for income above $12000.

If we assume that $x > $12000, then the tax amount is $\frac{x \times 25}{100} = 0.25x$.

As per the given conditions, we can write 0.25x - 0.15x = 1500

⇒ 0.1x = 1500

⇒ x = $15000

Therefore, Seb pays 0.25x = $3750 tax amount under the current system. (Answer)

Answer 2

Answer:6750

Step-by-step explanation: