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
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. SPs annual taxable income for years 1 through 5 is $123,600. Ms. OCs taxable income for years 1 through 4 is $14,500. In year 5, Ms. OC wins a lottery, and her taxable income for this one year jumps to $560,000. Assume the tax rate bracket has not changed.
How much total income does each individual earn over the 5-year period?
Compute each individuals average tax rate for the 5-year period.
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