In order to increase funding for federal entitlements programs, the federal government is planning on lifting the cap on the social security tax and taxing income between $250,000 and $2,000,000 again at 12.4% and income above $2,000,000 at a higher rate of 19.9%. The $250,000 income level would be fixed and would not change with inflation while the both the original $142,800 level and the new $2,000,000 level would be indexed with inflation. The inflation rate is 2.1%. Original Schedule $ $ $ $ $ $ - W Bracket (0) . 132,900.00 $ Bracket (0) $ 132,900.00 $ 250,000.00 $ 2,000,000.00 132,900.00 New Schedule 132,900.00 250,000.00 2,000,000.00 Consider the impact on three different businesses: A produce farmer with a real taxable income of $67,200 A cotton cultivator with a real taxable income of $216,000 A large dairy farm operator with a real taxable income of $2,102,000 Rate (1) 12.40% 0.00% Rate (1) 12.40% 0.00% 12.40% 19.90% i. What is the lowest average tax rate out of the three businesses given the original schedule (year 012

In order to increase funding for federal entitlements programs, the federal government is planning on lifting the cap on the social security tax and taxing income between $250,000 and $2,000,000 again at 12,4% and income above $2,000,000 at a higher rate of 19.9%. The $250,000 income level would be fixed and would not change with inflation while the both the original $142,800 level and the new $2,000,000 level would be indexed with inflation. The inflation rate is 2.1%. Consider the impact on three different businesses: - A produce farmer with a real taxable income of $67,200 - A cotton cultivator with a real taxable income of $216,000 - A large dairy farm operator with a real taxable income of $2,102,000 i. What is the lowest average tax rate out of the three businesses given the original schedule fyear v. For the dairy operation, what would be the social security tax owed in 5 years after the new schedule was implemented? a. $299,583 b. $301,387 c. $279,763 d. $284,962 e. None of the above Enter Response Here: vi. What would be the average tax rate for the dairy operation 5 years after the new schedule was implemented? a. 13.56% b. 12.22% c. 12.85% d. 14.23% e. None of the above Enter Response Here ii. What would be the average tax rate for that same business in the new schedule (year 0 )? a. 7.36% b. 12.07% C. 14.17% d. 12.40% e. None of the above Enter Response Here iii. What is the lowest average tax rate out of the three businesses in the new schedule (year a. 7.63% b. 0.00% c. 12.40% d. 10.30% e. None of the above Enter Response Here: iv. For the produce farm, what would be the social security tax owed in 4 years after the new schedule was implemented? a. $8,333 b. $8,869 In order to increase funding for federal entitlements programs, the federal government is planning on lifting the cap on the social security tax and taxing income between $250,000 and $2,000,000 again at 12,4% and income above $2,000,000 at a higher rate of 19.9%. The $250,000 income level would be fixed and would not change with inflation while the both the original $142,800 level and the new $2,000,000 level would be indexed with inflation. The inflation rate is 2.1%. Consider the impact on three different businesses: - A produce farmer with a real taxable income of $67,200 - A cotton cultivator with a real taxable income of $216,000 - A large dairy farm operator with a real taxable income of $2,102,000 i. What is the lowest average tax rate out of the three businesses given the original schedule fyear v. For the dairy operation, what would be the social security tax owed in 5 years after the new schedule was implemented? a. $299,583 b. $301,387 c. $279,763 d. $284,962 e. None of the above Enter Response Here: vi. What would be the average tax rate for the dairy operation 5 years after the new schedule was implemented? a. 13.56% b. 12.22% c. 12.85% d. 14.23% e. None of the above Enter Response Here ii. What would be the average tax rate for that same business in the new schedule (year 0 )? a. 7.36% b. 12.07% C. 14.17% d. 12.40% e. None of the above Enter Response Here iii. What is the lowest average tax rate out of the three businesses in the new schedule (year a. 7.63% b. 0.00% c. 12.40% d. 10.30% e. None of the above Enter Response Here: iv. For the produce farm, what would be the social security tax owed in 4 years after the new schedule was implemented? a. $8,333 b. $8,869