Economics: Principles, Problems, and Policies, 19th Edition

Published by McGraw-Hill Education
ISBN 10: 0073511447
ISBN 13: 978-0-07351-144-3

Chapter 16 - Public Finance: Expenditures and Taxes - Problems - Page 356: 3f

Answer

${$4,027.50}$ $10.7\%$ $6.2\%$

Work Step by Step

From 3e, the total tax owed is ${$5,027.50}$, and subtracting ${$1,000}$ for the per-child tax credit, now the amount actually paid will be ${$4,027.50}$. From part d, your taxable income is ${$37,500}$, so your average tax rate relative to your taxable income is $\frac{$4,027.50}{$37,500}$ \approx 10.7% Your average tax rate relative to your gross income is $\frac{$4,027.50}{$65,000} \approx 6.2\%$
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