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Search results for "Given the function T(x) is the function used to calculate the annual tax liability of an individual in the country of Bonanza. Explain fully what do you understand the function to be saying in terms of the taxation scale."
T(x) = 0.05x
0.15(x - 90,000) + 12,000
0.25(x - 140,000 + 12,000
0.35 ( x -220,000) + 32,000
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In regards to this answer, $ will be used to represent the currency of Bonanza.
For anyone in Bonanza who makes $90,000 or less, the tax liability rate is 5%. So an individual in this "bracket" would pay up to $4,500 in tax liability.
Anyone who makes over $90,000 up to and including $140,000, will still pay the 5% ($4,500) for $90,000 of their salary, but for the remaining salary, they will pay a tax liability of 15%. So, an individual making $140,000, would pay $4,500 + ($140,000 - 90,000)x0.15 which would equal $4,500 + $7,500 = $12,000. From a practice standpoint, it would be very painful to make slightly over $90,000!
Anyone who makes over $140,000 up to and including $220,000, will still pay the $12,000 on the first $140,000 of his/her salary, but for the remaining salary, will pay a tax liability of 25%. So, an indivudla making $220,000, would pay $12,000 + ($220,000 - $140,000)x0.25 which would equal $12,000 + $20,000 = $32,000.
Anyone who makes over $220,000 will still pay the $32,000 on the first $220,000 of his/her salary, but for the remaining slaary,w ill pay a tax liability of 0.35%. So, an individual making $300,000, would pay $32,000 + ($300,000 - $220,000)x0.35 = $32,000 + $28,000 = $60,000.
The tax function is step-wise and not continuous as there are breaks/plateaus in the function.
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