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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
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 |
Ms. Slattery's annual taxable income for years 1 through 5 is $140,200. Ms. Ochoa's taxable income for years 1 through 4 is $16,500. In year 5, Ms. Ochoa wins a lottery, resulting in taxable income of $635,000 for this one year. Assume the tax rate bracket has not changed.
Required:
- How much total income does each individual earn over the 5-year period?
- Compute each individual's average tax rate for the 5-year period.
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