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Government G levies an income tax with the following rate structure: Percentage Rate Bracket 6% Income from 0 to $30,000 10 Income from $30,001 to
Government G levies an income tax with the following rate structure:
Percentage Rate | Bracket |
---|---|
6% | Income from 0 to $30,000 |
10 | Income from $30,001 to $70,000 |
20 | Income from $70,001 to $200,000 |
28 | Income in excess of $200,000 |
Taxpayer O earns $45,500 annually during years 1 through 10. Taxpayer P earns $15,000 annually during years 1 through 5 and $76,000 annually during years 6 through 10. Assume the tax rate bracket has not changed.
Required:
- How much total income does each taxpayer earn over the 10-year period?
- Compute each taxpayers average tax rate for the 10-year period.
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