Suppose you are a typical person in the U.S. economy.You pay 4 percent of your income in a state incometax and 15.3 percent of your labor earnings in federalpayroll taxes (employer and employee sharescombined). You also pay federal income taxes as inTable 2 (p. 228). How much tax of each type do youpay if you earn $30,000 a year? Taking all taxes intoaccount, what are your average and marginal tax rates?What happens to your tax bill and to your average andmarginal tax rates if your income rises to $60,000?
Suppose you are a typical person in the U.S. economy.You pay 4 percent of your income in a state incometax and 15.3 percent of your labor earnings in federalpayroll taxes (employer and employee sharescombined). You also pay federal income taxes as inTable 2 (p. 228). How much tax of each type do youpay if you earn $30,000 a year? Taking all taxes intoaccount, what are your average and marginal tax rates?What happens to your tax bill and to your average andmarginal tax rates if your income rises to $60,000?
Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506725
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
Chapter28: Income Inequality And Poverty
Section: Chapter Questions
Problem 9CQ
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Question
Suppose you are a typical person in the U.S. economy.
You pay 4 percent of your income in a state income
tax and 15.3 percent of your labor earnings in federal
payroll taxes (employer and employee shares
combined). You also pay federal income taxes as in
Table 2 (p. 228). How much tax of each type do you
pay if you earn $30,000 a year? Taking all taxes into
account, what are your average and marginal tax rates?
What happens to your tax bill and to your average and
marginal tax rates if your income rises to $60,000?
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