C:3-64 TAX STRATEGY AND CRITICAL THINKING PROBLEMS Mike Barton owns Barton Products, Inc. The corporation has 30 employees. Barton Corporation expects $800,000 of net income before taxes in 2021. Mike is married and files a joint return with his wife, Elaine, who has no earnings of her own. Mike and Elaine have no other income, file a joint tax return, and claim the standard deduction. Mike's salary is $200,000 per year (already deducted in computing Barton Corporation's $800,000 net income). a. With the given facts, calculate the tax liability for Barton Corporation and for Mike and Elaine. b. Should Mike increase his salary from Barton by $50,000 to reduce the overall tax burden to himself and Barton Products? Because of the Social Security cap, the corporation and Mike each would incur a 1.45% payroll tax with the corporate portion being deductible. c. Should Barton employ Mike's wife Elaine for $50,000 rather than increase Mike's sal- ary? Take into consideration payroll taxes as well as federal income taxes. Note, that Elaine's salary would be well below the Social Security cap, so that she and the corpo- ration each would incur the full amount of payroll taxes with the corporate portion being deductible. Both Elaine's and the corporation's portion is 7.65%.