TOPM Mon 1 T 3 3. Use the same assumptions as we did above (a couple is married, filing jointly, with no dependents, using the standard deductions and exemptions). Use the tax schedules provided to determine the AGI and fill in the tables for the following scenarios. a. Suppose a couple paid $3,000 in taxes in 1963. Use this information and the 1963 tax schedule to fill in the remaining boxes of the table. Description Amount Adjusted Gross Income Standard Deductions $1,200 (married, filing jointly, no dependents) Taxable income Total Tax (calculate from schedule) $3,000 Effective tax rate b. Suppose a couple paid $3,000 in taxes in 1988. Use this information and the 1988 tax schedule to fill in the remaining boxes of the table. Description Amount Adjusted Gross Income $8.900 Standard Deductions (married, filing jointly, no dependents) Taxable income $3,000 Total Tax (calculate from schedule) Effective tax rate 20 Full + Suppose a couple paid $3,000 in taxes in 2013 Description Amount Adjusted Gross Income $20.000 Standard Deductions and Exemptions (married, filing jointly, no dependents) Taxable income Total Tax (calculate from schedule) $3,000 Effective tax rate d. In which year did paying $3,000 in taxes "cost the most"? Explain your choice e. Why would we expect the answer to part (d) to be that year? (.e. the answer to part (d) is either 1963, 1988, or 2013, whichever year it was, why would we expect that year to be the answer, even without having done any calculations?) If taxable income is over- so $4,000 $8,000 $12,000 $16,000 $20,000 $24,000 $28,000 $32,000 $36.000 $40,000 $44,000 $52.000 564,000 $76,000 $88,000 $100,000 $120,000 $140,000 $160,000 $180,000 $200,000 $300,000 $400,000 Taxable income Tax Brackets and Rates, 1963 but not over- the tax is: $4,000 $0 plus 20.0% of the amount over $8,000 $800 plus 22.0% of the amount over $12,000 $1,680 plus 26.0% of the amount over $16,000 $2,720 plus 30.0% of the amount over $20,000 $3.920 plus 34.0% of the amount over $24,000 $5,280 plus 38.0% of the amount over $28,000 $6,800 plus 43.0% of the amount over $32,000 $8,520 plus 47.0% of the amount over $36,000 $10,400 plus 50.0% of the amount over $40,000 $12,400 plus 53.0% of the amount over $44,000 $14,520 plus 56.0% of the amount over $52,000 $16,760 plus 59.0% of the amount over $64,000 $21,480 plus 62.0% of the amount over $76,000 $28,920 plus 65.0% of the amount over $88,000 $36,720 plus 69.0% of the amount over $100,000 $45,000 plus 72.0% of the amount over $120,000 $53,640 plus 75.0% of the amount over $140,000 $68,640 plus 78.0% of the amount over $160,000 $84.240 plus 81.0% of the amount over $180,000 $100,440 plus 84.0% of the amount over $200,000 $117,240 plus 87.0% of the amount over $300,000 $134,640 plus 89.0% of the amount over $400,000 $223,640 plus 90.0% of the amount over no limit $313.640 plus 91.0% of the amount over So $4,000 $8,000 $12,000 $16,000 $20,000 $24,000 $28,000 $32,000 $36,000 $40.000 $44,000 $52,000 564,000 $76,000 $88,000 $100,000 $120,000 $140,000 $160,000 $180,000 $200,000 $300,000 $400,000 if taxable income is over- $0 $29,750 Taxable income Tax Brackets and Rates, 1988 but not over- the tax is: $29,750 $0 plus 15.0% of the amount over no limit $4,463 plus 28.0% of the amount over SO $29,750 taxable income is over- SO $17,850 $72,500 $146.400 $223,050 $398,350 $450,000 Taxable income Tax Brackets and Rates, 2013 but not over- the tax is: 517.850 $0 plus 10.0% of the amount over $72,500 $1,785 plus 15.0% of the amount over $146,400 $9,983 plus 25.09% of the amount over $223,050 $28,458 plus 28.0% of the amount over $398,350 $49,920 plus 33.0% of the amount over $450,000 $107,769 plus 35.0% of the amount over no limit $125,846 plus 39.6% of the amount over SO $17,850 $72,500 $146,400 $223,050 $298.350 $450,000