Problem 02-06 (Algo) [LO 2-2] Mr. and Mrs. Jerald own a dry cleaning business that generates $183,750 taxable income each year. For the past few years, the couple's federal tax rate on this income has been 32 percent. Congress recently increased the tax rate for next year to 40 percent. Required: a. Based on a static forecast, how much additional revenue will the federal government collect from Mr. and Mrs. Jerald next year? b. How much additional revenue will the government collect if Mr. and Mrs. Jerald respond to the rate increase by working harder and earning $198,750 next year? c. How much additional revenue will the government collect if Mr. and Mrs. Jerald respond to the rate increase by working less and earning only $168,750 next year? × Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required A Required B Required C How much additional revenue will the government collect if Mr. and Mrs. Jerald respond to the rate increase by working harder and earning $198,750 next year? Additional revenue $ 13,500 X < Required A Required C >
Problem 02-06 (Algo) [LO 2-2] Mr. and Mrs. Jerald own a dry cleaning business that generates $183,750 taxable income each year. For the past few years, the couple's federal tax rate on this income has been 32 percent. Congress recently increased the tax rate for next year to 40 percent. Required: a. Based on a static forecast, how much additional revenue will the federal government collect from Mr. and Mrs. Jerald next year? b. How much additional revenue will the government collect if Mr. and Mrs. Jerald respond to the rate increase by working harder and earning $198,750 next year? c. How much additional revenue will the government collect if Mr. and Mrs. Jerald respond to the rate increase by working less and earning only $168,750 next year? × Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required A Required B Required C How much additional revenue will the government collect if Mr. and Mrs. Jerald respond to the rate increase by working harder and earning $198,750 next year? Additional revenue $ 13,500 X < Required A Required C >
Chapter16: Multistate Corporate Taxation
Section: Chapter Questions
Problem 27P
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![Problem 02-06 (Algo) [LO 2-2]
Mr. and Mrs. Jerald own a dry cleaning business that generates $183,750 taxable income each year. For the past few years, the
couple's federal tax rate on this income has been 32 percent. Congress recently increased the tax rate for next year to 40 percent.
Required:
a. Based on a static forecast, how much additional revenue will the federal government collect from Mr. and Mrs. Jerald next year?
b. How much additional revenue will the government collect if Mr. and Mrs. Jerald respond to the rate increase by working harder and
earning $198,750 next year?
c. How much additional revenue will the government collect if Mr. and Mrs. Jerald respond to the rate increase by working less and
earning only $168,750 next year?
× Answer is complete but not entirely correct.
Complete this question by entering your answers in the tabs below.
Required A Required B Required C
How much additional revenue will the government collect if Mr. and Mrs. Jerald respond to the rate increase by working harder
and earning $198,750 next year?
Additional revenue
$
13,500 X
<
Required A
Required C >](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc8514667-bf86-4079-a5fb-967fac7b38d7%2Fd71a893d-a3af-4745-9f1c-224b20a57721%2Fqt87zdj_processed.png&w=3840&q=75)
Transcribed Image Text:Problem 02-06 (Algo) [LO 2-2]
Mr. and Mrs. Jerald own a dry cleaning business that generates $183,750 taxable income each year. For the past few years, the
couple's federal tax rate on this income has been 32 percent. Congress recently increased the tax rate for next year to 40 percent.
Required:
a. Based on a static forecast, how much additional revenue will the federal government collect from Mr. and Mrs. Jerald next year?
b. How much additional revenue will the government collect if Mr. and Mrs. Jerald respond to the rate increase by working harder and
earning $198,750 next year?
c. How much additional revenue will the government collect if Mr. and Mrs. Jerald respond to the rate increase by working less and
earning only $168,750 next year?
× Answer is complete but not entirely correct.
Complete this question by entering your answers in the tabs below.
Required A Required B Required C
How much additional revenue will the government collect if Mr. and Mrs. Jerald respond to the rate increase by working harder
and earning $198,750 next year?
Additional revenue
$
13,500 X
<
Required A
Required C >
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