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Fill out the rest of the table. Note that you are calculating the effective tax rates, so you need to use the following formula to

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Fill out the rest of the table.

Note that you are calculating the effective tax rates, so you need to use the following formula to calculate the effective rate:

the amount the household pays in taxes in that plan discretionary income

In other words, to calculate the effective rate for each plan, make a fraction where the numerator is the amount they pay in taxes in that plan and the denominator is the discretionary income for the group. Do this out on a calculator (numerator divided by denominator). You can leave that as a decimal or convert it to a percentage by moving the decimal point two places to the right.

For example, let's say that for group E, I think the discretionary income is $59000. For the flat tax, group E pays 15157.50 in taxes. So I would do:

15157.50 59000 = .26 or 26%.

Then for the modified effective tax rate you would take the modified flat tax paid by group E and divide by 59000.

\begin{tabular}{|l|l|l|l|l|} \hline Group & Incomeperhousehold(indollars) & Discretionary Income & Effective rate, flat & Effective rate, modified \\ \hline A & 12000 & $10560 & & \\ \hline B & 29000 & $25520 & & \\ \hline C & 50000 & $39000 & & \\ \hline D & 79000 & $61620 & & \\ \hline E & 129000 & $98040 & & \\ \hline F & 295000 & $191750 & & \\ \hline \end{tabular}

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