Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A tax system has the following income tax brackets: $0 to $20,000, 10%; $20,001 to $40,000, 15%; $40,001 to $60,000, 20%; and over $60,000, 25%.

A tax system has the following income tax brackets: $0 to $20,000, 10%; $20,001 to $40,000, 15%; $40,001 to $60,000, 20%; and over $60,000, 25%. Calculate the effective tax rate and marginal tax rate for both of these individuals: Tom makes $90,000 and has $10,000 in itemized deductions and $3,500 in a personal exemption. John makes $35,000 and has $5,900 in the standard deduction and a $3,500 personal exemption. Based on your calculations for these individuals, is the tax system regressive, progressive or proportional? Why?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Internationale Rechnungslegung IFRS Praxis

Authors: Author

1st Edition

3834909289, 9783834909282

More Books

Students also viewed these Accounting questions

Question

What are the big five personality traits? (p. 60)

Answered: 1 week ago

Question

Explain the multicultural organization development (MCOD) process.

Answered: 1 week ago