Question

Yorketowne's city council opened a business park on the edge of the city. After five years, they had attracted two new manufacturers and four supporting service busi- nesses to the park. The total value of the property of all six businesses was $15,825,500. The compa- nies paid $0.78 per $1,000 of property value each year as property tax. In addition, the businesses employed 328 people at an average salary of $36,000. Each person paid a 1 percent city income tax each year.

Answer 1

Answer:

$130,423.89

Explanation:

This is an incomplete question. Searching online, I got the complete question which is presented below.

To provide additional employment and add to its tax base from businesses, Yorketowne’s city council opened a business park on the edge of the city. After five years, they had attracted two new manufacturers and four supporting service businesses to the park. The total value of the property of all six businesses was $15,825,500. The companies paid $0.78 per $1,000 of property value each year as property tax. In addition, the businesses employed 328 people at an average salary of $36,000. Each person paid a 1 percent city income tax each year.

a. What is the total amount of taxes the city collected as a result of opening the business park?

b. In addition to the tax dollars, what other benefits might the city receive from opening the business park?

Solution A

Total amount of taxes the city collected =

Property tax paid by the companies + income tax by employees

= $(Property Tax Rate*Property Value) + (Income Tax Rate*Average Salary*Number Of Employees)\\=(\frac{0.78}{1,000}*15,825,500) + (0.01*36,000*328)$

= $12,343.89+$118,080

= $130,423.89 tax income per annum.

Solution B

Other benefits that might accrue to the city from opening the business park include.

• Attraction of other businesses to the park given the success of existing businesses operating in the park.
• Increased employment as new businesses continue to be established in the park.
• Increased development at the edge of city as new homes and amenities are built to accommodate the employees of the city.