Sam is a single person. He earned $80,000 last year. Among his expenditure last year were $10,000 on interest payment of his home mortgage, $2,500 on the principal of his home loan, $700 in charitable contributions, $450 on health care and $392 for food while at work. The current standard deduction for a single person is $5,800 and the personal exemption is $3,700.

a) Please calculate how much Sam owes in taxes to the government. Be careful about which item above is deductible if he chooses itemized deduction. Show and label your work to facilitate the awarding of partial credit. Please use the tax table below.

Taxable Income
Over	But Not Over	Pay $		% on Excess	Of the Amount Over
$0	$8,500	$0	+	10%	$0
$8,500	$34,500	$850	+	15%	$8,500
$34,500	$83,600	$4,750	+	25%	$34,500

b) What is his average tax rate? (%)

c) What is his marginal tax rate? (%)

d) Is this tax a progressive one? Briefly explain.

e) Using Sam, the person in this example, please explain how the United States federal income tax might not be horizontally equitable.