1.Suppose currently you earn taxable income of RM100,000 per year. You are subject to Marginal Tax Rate (MTR) of 50 percent. Currently, your Average Tax Rate (ATR) is 35 percent.

a.Calculate your annual tax;

b.Calculate the extra tax that you pay annually if your annual income increase to RM110,000 per year;

c.What is your ATR when annual income is RM110,000?

2.The payrol tax for unemployment insurance in country Viva taxes all wages up to a maximum of $30,000 per worker at a 5 percent flat tax rate. What are the Marginal Tax Rate (MTR) and Average Tax Rate (ATR) on the wages for

a.A store supervisor with annual wages of $18,000;

b.A University lecturer with wages of $35,000 per year;

c.A corpoorate CEO with an annual salary of $500,000

3.How does the ability to pay priciple of taxation differ from the benefit principle? What problems are encountered in implementing both these tax philosophies?