What does a person who earns $74500 pay as taxes in the following case: In a progressive income tax system, the tax till $25000 is 10%, it becomes 25% till $50000 and beyond $50000 it is 30%.
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calendarEducator since 2010
write12,544 answers
starTop subjects are Math, Science, and Business
The person earns $74500, this can be divided into the three slabs as $25000 in the first, $25000 in the second and we are left with 74500 – 50000 = 24500 in the third.
The tax paid on the first $25000 = 25000* 10% = 2500
The tax paid on the $25000 lying in the next slab is 25000*25% = 6250
The remaining $24500 attracts a tax of 24500* 30% = 7350
The total tax to be paid adds up to 2500 + 6250 + 7350 = 16100
The total tax to be paid on the income of $74500 is $16100.
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calendarEducator since 2008
write3,662 answers
starTop subjects are Math, Science, and Social Sciences
We will divide the income into the three categories.
74,500 = 25,000 + 25,000 + 24,500
The first 25,000, the tax is 10%
==> 10% * 25,000 = 2500
The second 25,000 , the tax is 25%
==> 25% * 25,000 = 6256
The third is 24,500 , the tax is 30%.
==> 30% * 24,500 = 7350
Now we will add all three taxes.
==> 2500 + 6250 + 7350 = 16,100
Then the person whose income is 74,500 pays taxes of $16,100.
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