Consider the claim mentioned in class that Warren Buffet pays a lower tax rate than his secretary. It's not entirely clear what this means exactly but let's interpret it to mean that his average tax rate is lower than his secretary's average tax rate. This claim seemingly rests on the difference between how capital gains are taxed compared to regular wages.

Let's assume that Warren Buffet's income comes entirely from long-term capital gains which are taxed at a constant rate of 20% for high earners such as Mr. Buffet. (Note that if there were any short-term capital gains, they would be taxed as regular income.) Also since his income is so high, we can ignore any exemptions or deductions for Warren Buffet and just treat that 20% as his average tax rate. (For the record, the tax code is very complex and Warren Buffet probably employs a small army of lawyers and accountants who try to reduce this rate as much as possible so it may be lower but let's not worry about that.)

Now consider the secretary. First, let's assume that he's a man so as not to run afoul of any horrible stereotypes. Then assume that he is single with no kids (so only one exemption) and he takes the standard deduction. How much money does he need to make to have an average tax rate of 20%? (The answer I am entering is a pretty round number which works out to 19.9175%. Get within 1% of that number. Don't add a dollar sign.)

[Note: I realized after making this that the rates and brackets I used were for married filing jointly not for single but I don't want to do it all over again--it was kind of a pain--so just use those tax brackets in the book in figure 17.2 along with one exemption and the single standard deduction. These numbers can be found in the text. Also, if you have an older book with different numbers, (the brackets in my book are from 2016) then take a picture of your calculations and send it to me so I can see if you are doing the right thing.

Please write/type out all the steps neatly.