Graded Assignment 1 Ch Seved 5 Given the following tax stru

Graded Assignment # 1 (Ch Seved 5 Given the following tax struçture, what minimum tax would need to be respect to average tax rates? to make the tax progressive with Taxpayer Salary Intereat Iax Mihwah $10,500 5.000 S 420 0.5 points Shameika $51,500 20,000 77 Skipped eBook Print

Solution

Solution

Step 1- Average tax rate on mihwah (Tax amount/Taxable income*100)

= $420/$10500 = 4%

Step 2 - Tax to be payable by Shameika

= $51500*4% = $2060

Step 3 - To make the tax progressive with respect to average tax rate, Minimum tax should be $2061.