7.8.26 a),b)Use the spreadsheet federalindividualratehistory.xlsx to answer the questions. It contains a complete history of income tax brackets and rates from the inception of the income tax in 1913 through 2013, in both dollars current in each year and adjusted for inflation (2012 dollars)a) compute the tax due in 2003 for a single taxpayer with a net taxable income of $30k. what is her effective tax rate?b) suppose the taxpayer received raises each year that kept up with inflation. use an inflation calculator to calculate her net taxable income in 2013. Federalindividualratehistory.xlsx1913-2013CPICPI Datahttp://taxfoundation.org/article/us-federal-individual-income-tax-rates-history-1913-20resented in nominal dollar amounts.2013SingleHead of HouseholdMarginalTax BracketsMarginalTax Bracketsot OverTax RateOverBut Not OverTax RateOverBut Not Over$8,92510.0%$0$8,92510.0%$0$12,75036,25015.0%$8,925$36,25015.0%$12,750$48,60073,20011,52599,17525.0%$36,250$87,85025.0%$48,600$125,45028.0%$87,850$183,25028.0%$125,450$203,15033.0%$183,250$398,35033.0%$203,150$398,35025,00035.0%$398,350$400,00035.0%$398,350$425,00039.6%$400,00039.6%$425,000 Federalindividualratehistory.xlsx1913-2013CPI Data39,32528.0%$70,350$146,75028.0%$100,500$162,70059,55033.0%$146,750$319,10033.0%$162,700$319,10035.0%$319,10035.0%$319,5002003SingleHead of HouseholdMarginalTax BracketsMarginalTax Bracketsot OverTax RateOverBut Not OverTax RateOverBut Not Over-7,0003,725-7,325-7,350-5,97510.0%$0$7,00010.0%$0$10,00015.0%$7,000$28,40015.0%$10,000$38,05025.0%$28,400$68,80025.0%$38,050$98,25028.0%$68,800$143,50028.0%$98,250$159,10033.0%$143,500$311,95033.0%$159,100$311,95035.0%$311,95035.0%$311,950

Federal Tax Bracket While calculating federal tax which are used for the method of progressive tax system which describes that the higher the income earning then it increase the tax rate and due amount as well. It is beneficial for the lower income group which can be comparatively low level tax while comparing to the higher level income group as well.A) Calculation of Tax due in 2003 Here Net Taxable Income = $30000 In the Case of Single Calculation of Tax due For 2003 Status : Single Tax Bracket Tax % Tax Due Amount $ 0 to $ 7000 10% 700 $7000 to $28400 ($21400*15%) 15% 3210 $28400 to $30000 ($1600*25%) 25% 400 Total Tax Due 4310 Calculation of Effective Tax Rate Here Total Taxable Income = $30000 Total tax due = $ 4310 Effective Tax Rate = $4310 / $ 30000 = 14.37% 2) Calculation of Net taxable income using inflation Calculator in the year 2013 Net taxable income for the year 2003 = $30000 While using the inflation calculator Inflation Percentage = 2.40% and cumulative inflation rate from 2003 to 2013 is Around 26.64%. = $ 30000 * 26.64% = $ 7992 Net Taxable Income Using inflation Calculator in the year 2013 = $30000 + $ 7992 = $37992