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235,000-35250=199,750 199,750= Pretax Income (1-.2) 199,750/.8= Pretax Income of 249,687.50 249,687.50*20%= 49,937.50 Help Please, I am not understanding where I went wrong here. Thanks! Song
235,000-35250=199,750
199,750= Pretax Income (1-.2)
199,750/.8= Pretax Income of 249,687.50
249,687.50*20%= 49,937.50
Help Please, I am not understanding where I went wrong here. Thanks!
Song earns $235,000 taxable income as an interior designer and is taxed at an average rate of 15 percent (i.e., $35,250 of tax). Required: a. If Congress increases the income tax rate such that Song's average tax rate increases from 15 percent to 20 percent, how muc more income tax will she pay assuming that the income effect is descriptive? Note: Round your intermediate calculations and final answer to 2 decimal places. b. If the income effect is descriptive, the tax base and the tax collected will increase. Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. If Congress increases the income tax rate such that Song's average tax rate increases from 15 percent to 20 percent, how much more income tax will she pay assuming that the income effect is descriptive? Note: Round your intermediate calculations and final answer to 2 decimal placesStep by Step Solution
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