Answered: You are looking at three different job…

Microeconomics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506893

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter15: Income Inequality And Poverty

Section: Chapter Questions

Problem 7CQ

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Question

You are looking at three different job options, one in Pennsylvania, one in Texas, and one in New York.

The offers are as follows:

	Salary	State tax rate
Pennsylvania	$62,000	3.07%
Texas	$64,000	0.00%
New York	$68,000	6.85%

What is the take home pay of the three options? Which of these offers will you accept if you are only interested in maximize your after tax income?

Pennsylvania:

Texas:

New York:

Job accepted:

Regardless of which job you take, you will have to pay federal income taxes. Assuming you are offered $65,000 use the following tax brackets to determine the federal income tax you owe.

Tax Bracket	Low end	High end
10%	$0	$9,225
15%	$9,225	$37,450
25%	$37,450	$90,750
28%	$90,750	$189,300

TAX OWED:

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