Atter Flat tax. Steve Forbes ran for U.S. president in 1996 and 2000 on a platform proposing a 17% flat tax, that is, an income tax that would simply be 17% of each tax payer's taxable income. Suppose that Alice was single in the year 2020 with a taxable income of $30,000 and that Joe was single in the year 2020 with a taxable income of $300,000. 2020 Tax Table for Singles If Taxable Income Is over $0 9876 40, 126 85,526 163,301 207,351 But not over $9875 40, 125 85,525 163,300 207,350 518,400 This amount $987.50 4617.50 14,605.50 33, 271.50 47,367.50 The Tax is Plus this % 10% 12% 22% 24% 32% 35% of the excess over $0 9875 40, 125 85,525 163,300 207,350

Atter Flat tax. Steve Forbes ran for U.S. president in 1996 and 2000 on a platform proposing a 17% flat tax, that is, an income tax that would simply be 17% of each tax payer's taxable income. Suppose that Alice was single in the year 2020 with a taxable income of $30,000 and that Joe was single in the year 2020 with a taxable income of $300,000. 2020 Tax Table for Singles If Taxable Income Is over $0 9876 40, 126 85,526 163,301 207,351 But not over $9875 40, 125 85,525 163,300 207,350 518,400 This amount $987.50 4617.50 14,605.50 33, 271.50 47,367.50 The Tax is Plus this % 10% 12% 22% 24% 32% 35% of the excess over $0 9875 40, 125 85,525 163,300 207,350

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Steve Forbes ran for U.S. president in 1996 and 2000 on a platform proposing a 17% flat tax, that is, an income tax that would simply be 17% of each tax payer's taxable income. Suppose that Joe was single in the year 2016 with a taxable income of $300,000.We learn that Joe actually made $600,000, but his taxable income was only $300,000 because of various deductions allowed by the system in 2016. Proponents of the flat tax say that many of these deductions should be eliminated, so the 17% flat tax should be applied to Joe's entire $600,000.How much income would Joe have to make for the 17% flat tax to equal the amount he pays in the year 2016 with a taxable income of $300,000? (Refer to the 2016 Tax Table for Singles for tax rates. Round your answer to the nearest cent.)
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