Question
Country A levies an individual income tax with the following rate structure: Percentage Rate Bracket 10% Income from 0 to $20,000 15 Income from $20,001
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Country A levies an individual income tax with the following rate structure:
Percentage Rate | Bracket |
10% | Income from 0 to $20,000 |
15 | Income from $20,001 to $75,000 |
25 | Income from $75,001 to $160,000 |
30 | Income in excess of $160,000 |
Refer to Country As rate structure described in the preceding problem. Ms. SPs annual taxable income for years 1 through 5 is $150,000. Ms. OCs taxable income for years 1 through 4 is $20,000. In year 5, Ms. OC wins a lottery, and her taxable income for this 1 year jumps to $670,000.
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How much total income does each individual earn over the 5-year period?
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Compute each individuals average tax rate for the 5-year period.
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