2. Taxes paid for a given income level Suppose that Charles is preparing to file his taxes. He is single and currently lives in Philadelphia. Charles earned $200,000 in taxable income in 2022. He reviews the following table, which shows the [RS tax rates for a single taxpayer in 2022. The Tax Rate Is... On Annual Taxable Income... (Percent) Up to 510,225 10.0 From $10,225 to $41,775 12.0 From 541,725 to $89,025 22.0 From $89,025 to $120,050 24.0 From 5120,050 to 5215,950 32.0 From $215,950 to $539,900 35.0 Over $539,900 3?.0 Based on the IRS table, Charles calculates that his marginal tax rate is Y when his annual taxable income is $200,000. Charles calculates that he owes Y in income taxes for 2022. Charles then calculates that his average tax rate is Y , based on the annual income level and the amount of taxes he owes for 2022. After figuring out what he owes in taxes in 2022, Charles decides to ask an accountant for tax advice. The accountant claims that he has found a legal way to shelter $2,000 of taxable income from the federal government. The maximum amount that Charles is willing to pay to learn this strategy and reduce his taxable income by $2,000 is V . (Hint: Sheltering some income means finding a legal way to avoid being charged income tax on that income. For example, someone who has 550,000 in taxable income Based on the IRS table, Charles calculates that his marginal tax rate is V when his annual taxable income is $200,000. Charles calculates that he owes V in income taxes for A 10% 1 2% Charles then calculates that his average tax rate is V , based on th. income level and the amount of taxes he owes for 2022. 2 2% ountant for tax advice. The accountant claims that he has found a legal After guring out what he owes in taxes in 2022, Charles decides to as 24% way to shelter $2,000 of taxable income from the federal government. 32\"! Cl The maximum amount that Charles is willing to payr to learn this strate- 35% educe his taxable income by $2,000 is V . (Hint: Sheltering some income means finding a legal way;r to avoid being charged income tax on that income. For example, someone who has $50,000 in taxable income and shelters $10,000 pays income tax on onlyr $40,000.) Based on the IRS table, Charles calculates that his marginal tax rate is V when his annual taxable income is $200,000. Charles calculates that he owes I V in income taxes for 2022. $34,64?.50 Charles then calculates that his te is V , based on the annual income level and the amount of taxes he owes for 2022. $40,451.50 After guring out what he owes '2, Charles decides to ask an accountant for tax advice. The accountant claims that he has found a legal $43, 204.00 way to shelter $2,000 of taxabl- he federal government. $44,231.50 The maximum amount that Cha $64 000 00 I pay to leam this strategy and reduce his taxable income by $2,000 is V . (Hint: Sheltering some income means finding a |. id being charged income tax on that income. For example, someone who has $50,000 in taxable income and shelters $10,000 pays income tax on only $40,000.) From $215,950 to $539,900 35.0 Over $539,900 37 19% 22% 24% Based on the IRS table, Charles calculates that his I tax rate is when his annual taxable income is $200,000. 27% Charles calculates that he owes taxes for 2022. 32% Charles then calculates that his average tax rate is , based on the annual income level and the amount of taxes he owes for 2022. After figuring out what he owes in taxes in 2022, Charles decides to ask an accountant for tax advice. The accountant claims that he has found a legal way to shelter $2,000 of taxable income from the federal government. The maximum amount that Charles is willing to pay to learn this strategy and reduce his taxable income by $2,000 is . (Hint: Sheltering some income means finding a legal way to avoid being charged income tax on that income. For example, someone who has $50,000 in taxable income and shelters $10,000 pays income tax on only $40,000.)Based on the IRS table, Charles calculates that his marginal tax rate is V when his annual taxable income is $200,000. Charles calculates that he owes V in income taxes for 2022. Charles then calculates that his average tax rate is V , based on the annual income level and the amount of taxes After guring out what he owes in taxes in 2022r Charles decides to ask an accountant for tax advice. The accountant way to shelter $2,000 of taxable income from the federal government. The maximum amount that Chanes is willing to pay to learn this strategy and reduce his taxable income by $2,000 is j I. (Hint: Sheltering some income means finding a legal way to avoid being charged income tax on that income. For example, someone who has $50,000 in taxable income and shelters $10,000 pays income tax on only $40,000.) 3. Principles of tax equity The mayor of New York City wants to upgrade the city's public transportation infrastructure. To finance the improvements, the mayor proposes an additional charge of $1 for each public transit ride taken. What principle does this tax policy follow? O The ability-to-pay principle O The benefits principle Both the ability-to-pay principle and the benefits principle O Neither the ability-to-pay principle nor the benefits principle