Consider the following tax structure: Income Bracket Marginal Tax Rate - $6,000 $6,000 $25,000 $0 - 0% 20% > $25,000 40% a. Mr. Smith has an income of $90,000 per annum. Calculate his tax bill for the year: $ b. What is his average tax rate? % (Round to two decimal places.) c. What is his highest marginal tax rate? %

Consider the following tax structure: Income Bracket Marginal Tax Rate - $6,000 $6,000 $25,000 $0 - 0% 20% > $25,000 40% a. Mr. Smith has an income of $90,000 per annum. Calculate his tax bill for the year: $ b. What is his average tax rate? % (Round to two decimal places.) c. What is his highest marginal tax rate? %

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter12: The Design Of The Tax System

Section: Chapter Questions

Problem 3CQQ

See similar textbooks

Similar questions

What is the difference between a progressive tax, a proportional tax, and a regressive tax?
What are the main categories of U.S. federal government taxes?
The social security tax is 6.2 on employees income earned below 113,000. Is this tax progressive, regressive or proportional?
Have the spending and taxes of the U.S. federal government generally had an upward or a downward trend in the last few decades?
What taxes would an individual pay if he were self-employed and the business is not incorporated?
Federal excise taxes on gasoline vary widely across the developed world. The United States has the lowest taxes at USD $0.40 per gallon (or Â£0.07 per liter), Canada has taxes of $0.60 per gallon, Japan and much of Europe is $2.00 per gallon, while Britain has the highest tax at $2.83 a gallon or Â£0.5 per liter. If gasoline taxes are intended to reduce the time losses from road congestion in urban environments and gasoline pre-tax costs about Â£0.40 per liter, why might the optimal tax in Canada be 50 percent higher than in the United States? What would be an explanation for why adjacent countries would have such different estimates of the price elasticity of demand for auto driving?16