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ong earns $100,000 taxable income as an interior designer and is taxed at an average rate of 20 percent (i.e., $20,000 of tax). .If Congress increases the income tax rate such that Song's average tax rate increases from 20 percent to 25 percent, how much ore income tax will she pay assuming that the income effect is descriptive? (Round your intermediate calculations and final ans 2 decimal places.) Additional income tax . If the income effect is descriptive, the tax base and the tax collected will increase.

ong earns $100,000 taxable income as an interior designer and is taxed at an average rate of 20 percent (i.e., $20,000 of tax). .If Congress increases the income tax rate such that Song's average tax rate increases from 20 percent to 25 percent, how much ore income tax will she pay assuming that the income effect is descriptive? (Round your intermediate calculations and final ans 2 decimal places.) Additional income tax . If the income effect is descriptive, the tax base and the tax collected will increase.

FINANCIAL ACCOUNTING
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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Song earns $100,000 taxable income as an interior designer and is taxed at an average rate of 20 percent (i.e., $20,000 of tax). a. If Congress increases the income tax rate such that Song's average tax rate increases from 20 percent to 25 percent, how much more income tax will she pay assuming that the income effect is descriptive? (Round your intermediate calculations and final answer to 2 decimal places.) Additional income tax b. If the income effect is descriptive, the tax base and the tax collected will increase. O True O False
Transcribed Image Text:Song earns $100,000 taxable income as an interior designer and is taxed at an average rate of 20 percent (i.e., $20,000 of tax). a. If Congress increases the income tax rate such that Song's average tax rate increases from 20 percent to 25 percent, how much more income tax will she pay assuming that the income effect is descriptive? (Round your intermediate calculations and final answer to 2 decimal places.) Additional income tax b. If the income effect is descriptive, the tax base and the tax collected will increase. O True O False
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