Evangeline is a citizen of Independence, whose income and expenditures are shown in Table 20P-3. Table 20P-2 shows Independence’s personal income tax schedule. In answering the following questions, you may assume the following.
(1) All income other than capital gains falls under the personal income tax.
(2) Deductible expenses are subtracted from income before income tax is calculated.
(3) Charitable donations and money paid in pay-roll taxes are tax-deductible.
(4) Payroll tax is 5 percent of earned income up to $50,000.
(5) Capital gains tax is 3 percent on capital gains over $10,000.
(6) Sales tax is 6 percent.
a. How much does Evangeline pay in payroll taxes?
b. How much does Evangeline pay in capital gains taxes?
c. What is Evangeline’s adjusted income subject to the personal income tax? How much does she pay in personal income tax?
d. How much does Evangeline pay in sales taxes?
e. How much does Evangeline pay in taxes, in total? What percentage of her income does this represent?