# Using the table of Progressive Taxes below, compute the taxable income and taxes for the...

## Question:

Using the table of Progressive Taxes below, compute the taxable income and taxes for the following taxpayers.

Which taxpayer has

a. the highest nominal tax rate?

b. the highest effective tax rate?

c. the highest marginal tax rate?

Taxpayer | Gross Income | Exemptions and Deductions | Taxable Income | Tax |
---|---|---|---|---|

A | $20,000 | $6,000 | - | - |

B | $40,000 | $28,000 | - | - |

C | $80,000 | $34,000 | - | - |

D | $200,000 | $110,000 | - | - |

Table: Progressive Taxes

Tax Bracket | Marginal Tax Rate |
---|---|

$1 - $8,375 | 10% |

$8,375 - $34,000 | 15% |

$34,000 - $82,400 | 25% |

$82,400 - $171,850 | 28% |

$171,850 - $373,650 | 33% |

Over $373,650 | 35% |

Source: Internal Revenue Service (2010 tax rates for single individuals).

## Progressive Tax Rates:

Progressive tax rates means as income taxable income increases, so does the tax rate. Once income thresholds are met, any additional dollar will be taxed at a marginal tax rate. Once other thresholds are met, an increase will occur on every dollar made after that amount.

## Answer and Explanation: 1

Become a Study.com member to unlock this answer! Create your account

View this answer

Taxpayer | Gross Income | Exemptions and Deductions | Taxable Income | Tax |
---|---|---|---|---|

A | $20,000 | $6,000 | 14,000 | 1,681.25 |

B | $40,000 | $28,000 | 12,000 | 1,381.25 |

C | $80,000 | $34,000 | 46,000 | 7,681.... |

See full answer below.

#### Ask a question

Our experts can answer your tough homework and study questions.

Ask a question Ask a question#### Search Answers

#### Learn more about this topic:

from

Chapter 13 / Lesson 6A progressive tax code means that individuals who earn a higher income pay more taxes. Learn about the three types of tax codes (progressive, regressive, and proportional) and the primary economic effect for each method of taxation.

#### Related to this Question

- The effective income tax rate is defined as the percentage of taxes paid in relation to a taxpayer's gross income. Calculate the effective tax rate for a person with the following profile: |Gross income | $60,000.00 |Number of exemptions|2 (assume $3,50
- Assume a tax system with a tax of $1,000 on taxable income of $10,000 and a $1,500 tax on taxable income of $20,000. Is the tax rate system: A. Progressive B. Regressive C. Proportional D. None of the above.
- The tax rates are as shown. Taxable Income Tax Rate $0 - 50,000 15% 50,001 - 75,000 25% 75,001 - 100,000 34% 100,001 - 335,000 39% What is the average tax rate for a firm with a taxable income of $123,013? a. 27.87% b. 20.00% c. 36.28% d. 25.38% e. 3
- Based on the amounts of taxable income below, compute the federal income tax payable in 2013 on each amount assuming the taxpayer is married filing a joint return. Also, for each amount of taxable income, compute the average tax rate and marginal tax rate
- Assume a tax system with a tax of $1,000 on taxable income of $1,500 tax on taxable income of $20,000. Is the tax rate system: a. None of the above. b. Progressive c. Regressive d. Proportional
- If the incremental federal income tax rate is 38% and the incremental state income tax rate is 6%, what is the effective combined income tax rate (t)? If state income taxes are 14% of taxable income,
- In reviewing the tax rate schedule for a single taxpayer, Chuck notes that the tax on $75,000 is $4,867.50 plus 25 percent of the taxable income over $35,350. What does the $4,867.50 represent? a. Income tax on $75,000 b. Income tax on $35,350 c. Incom
- Based on the amounts of taxable income below, compute the federal income tax payable in 2016 on each amount assuming the taxpayers are married filing a joint return. Also, for each amount of taxable income, compute the average tax rate and the marginal ta
- Given the following tax structure, Taxpayer Salary Muni-Bond Interest Total Tax Mihwah $10,000 $10,000 $600 Shameika $50,000 $30,000 ? What minimum tax would need to be assessed on Shameika to make the tax progressive with respect to average tax rates?
- Given the following tax structure, what minimum tax would need to be assessed on Shameika to make the tax progressive with respect to average tax rates? Taxpayer Salary Muni-Bond Interest Total Tax Mihwah $10,000 $10,000 $600 Shameika $50,000 $30,000 ?
- The Conrad Company has $267,000 in taxable income. Using the rates on the taxable income table below, calculate their average tax rate and marginal tax rate. 40,050, 66,750, 90,780, 104,130, 90,780, 93,450, 101,460, 93,450
- The Conrad Company has $267,000 in taxable income. Using the rates on the taxable income table below, calculate their average tax rate and marginal tax rate.
- Suppose you currently have taxable income of $50,000 per year. You are subject to a marginal income tax rate of 20%, and your current average tax rate is 10%. a. How much do you pay annually in tax
- Corporate Tax Rate Schedule Range of taxable income Base tax rate + (Marginal rate * amount over base braket) 0 to 50,000 0 + (15% * amount over $0) 50,000 to 75,000 7,500 + (25% * amount over $50,00
- "Marginal income tax rates" a) are nearly always lower than effective income tax rates. b) refers to the tax rate or bracket on the first dollar earned. c) refers to the tax rate or bracket on the last dollar earned and in a progressive income tax system,
- State tax. Federal tax. Incremental tax If a company earns $500,000 in revenue, and has $100,000 in allowable expenses, calculate the: a) State Tax owed if 9% State Tax Rate b) Federal Tax owed: c) The Combined incremental tax rate
- Compute the 2019 tax liability and the marginal and average tax rates for the following taxpayers. a. Chandler, who files as a single taxpayer, has taxable income of $150,400. b. Lazare, who files as a head of household, has taxable income of $54,200.
- The Coolidge family has taxable income of $165,000 in 2012. They live in a state in which income over $100,000 is taxed at 13%. What is their total effective (marginal) tax rate? Assume 28% federal tax rate.
- Tax rates other than the current tax rate may be used to calculate the deferred income tax amount on the balance sheet if: A. the future tax rates have been enacted into law. B. it appears likely that a future tax rate will be less than the current tax ra
- Assuming constant tax rates, pre-tax book income X the tax rate equals _____. Taxes paid in cash for the current year is the tax rate X _____.
- Lillian, a single taxpayer, had the following income and deductions for the tax year 2018. For tax planning purposes. which of the following three rates is the most important: marginal, average or effective tax rate? | __Income__ | | Salary | $90,000
- Assume a Social Security tax rate of 6.2% is applied to maximum earnings of $118,500 and a Medicare tax rate of 1.45% is applied to all earnings. Calculate the Social Security and Medicare taxes for the following situations: Cumulative payment before curr
- A progressive income tax is one where: A. All taxpayers pay the same rate of tax. B. Tax rates increase when the tax base increases. C. The rate of tax decreases as the tax base increases. D. None of these.
- When the tax base is $40,000, the tax liability is $4,000. When the tax base is $400,000, the tax liability is $40,000. This tax has a rate structure that is: a. Progressive b. Regressive c. Ad valore
- Which, if any, of the following taxes are proportional (rather than progressive)? A) State general sales tax B) Federal corporate income tax C) Federal estate tax D) Federal individual income tax E) All of these
- Which of the following would be used to compute the federal income taxes to be withheld from an employee's earnings? a. FICA tax rate b. Wage and tax statement c. FUTA tax rate d. Wage bracket and withholding table
- Refer to the table below: 2014 Tax Data Tax Bracket Marginal Tax Rate $0 - 9,075 10% $9,075 - 36,900 15 $36,900 - 89,350 25 $89,350 - 186,350 28 $186,350 - 405,100 33 $405,100 - 406,750 35 Over $406
- Which of the following will cause the reported effective tax rate to differ from the federal statutory tax rate? I. Foreign tax rates that are lower than federal statutory tax rate. II. Tax-exempt income. III. Different depreciation methods for tax and
- (a) What are the average tax rate and marginal tax rate? (b) What are the similarities and differences between the average tax rate and marginal tax rate?
- With a taxable income of $332,000, what it the effective tax rate? What is marginal tax rate?
- Using the following corporate tax rate schedule given, perform the following: a) Calculate the tax liability, after-tax earnings, and average tax rates for the following levels of corporate earnings
- A taxpayer can invest $5,000 in a common stock that pays no dividends but appreciates at a rate of 8%. The taxpayer's tax rate is 30%. He plans to sell the stock after 30 years. a. Find the after-tax accumulation and the annualized after-tax rate of retur
- Which of the following is defined as a tax rate that decreases when the tax base increases? a. Average tax b. Proportional tax c. Marginal tax d. Progressive tax e. Regressive tax
- Lillian, a single taxpayer, had the following income and deductions for the tax year 2018. Compute Lillian's marginal, average and effective tax rates. | __Income__ | | Salary | $90,000 | Business Income | 24,000 | Interest income from taxable bonds
- Using the tax table, determine the amount of taxes for the following situations: a. A head of household with taxable income of $55,000 b. A single person with taxable income of $35,000 c. Married t
- Note: For this edition, the 2014 federal income tax tables, FICA rates, OASDI rate of 6.2% on wages up to $117,000 and the employee and employer HI rate of 1.45% on all wages was used. The following i
- 1. Calculate the cash payment for income taxes for MarkowitzCorporation based on the following information:income tax expense $93,000, $8,000 decrease infederal income taxes payable and $10,000 increase in state incometaxes payable during the year. A. $91
- Sara is a single taxpayer with a taxable income of $52,000. If the tax tables had 10% tax on the first $8,000 of taxable income, 15% on income above $8,000 but less than 34,000,and 25% on income over $34,000. What is Sara's average tax rate?
- Using the appropriate tax tables or tax rate schedules, determine the tax liability for tax year 2014 in each of the following instances. In each case, assume the taxpayer can take only the standard d
- Taxable Income Tax Rate $0-50,000 15% 50,001- 75,000 25 75,001-100,000 34 100,001 335,000 39 335,001-10,000,000 34 10,000,001-15,000,000 35 15,000,001-18,333,333 38 18,333,334+ 35 The 39 percent and 3
- The current FUTA tax rate is 0.8%, and the SUTA tax rate is 5.4%. Both taxes are applied to the first $7,000 of an employee's pay. Assume that an employee earned $9,000. What is the amount of total unemployment taxes the employer must pay on this employee
- The income tax rate is 30% on current and is payable in the first quarter of 2014. The pretax income before the preceding adjusting entries is $6,800. Compute Income tax expense and Income tax payable.
- Paddle Fans & More has a marginal tax rate of 34 percent and an average tax rate of 23.7 percent. If the firm earns $138,500 in taxable income, how much will it owe in taxes? a. $31,366.67 b. $31,500.00 c. $32,824.50 d. $39,957.25 e. $47,090.00
- The current FUTA tax rate is 0.8%, and the SUTA tax rate is 5.4%. Both taxes are applied to the first $6,500 of an employee's pay. Assume that an employee earned $12,100. What is the amount of total unemployment taxes the employer must pay on this employe
- For this edition, the 2014 federal income tax tables, FICA rates, OASDI rate of 6.2% on wages up to $117,000 and the employee and employer HI rate of 1.45% on all wages was used. Unless instructed ot
- "Effective income tax rates": a. cannot be accurately determined. b. are seldom considered by economists. c. have no legal meaning. d. refers to the average percentages of taxable income actually paid in taxes.
- Kapitol Services Corp estimates that its 2017 taxable income will be $500,000. Thus it is subject to a flat 34% income tax rate and incurs a $170,000 liability. For the following situation, compute Kapitol's 2017 minimum quarterly estimated tax paymen
- PMF, Inc. is equally likely to have EBIT this coming year of $0 million, $10 million, or $20 million. Its corporate tax rate is 38%, and investors pay a 15% tax rate on income from equity and a 45% tax rate on interest income. a. What is the effective tax
- The following taxes are regressive except: A. FICA and self-employment taxes B. federal income tax for individuals C. All of these. D. unemployment taxes
- The current FUTA tax rate is 0.8%, and the SUTA tax rate is 5.4%. Both taxes are applied to the first $6,500 of an employee's pay. Assume that an employee earned total wages of $12,100. What is the amount of total unemployment taxes the employer must pay
- "Effective income tax rates" a) are seldom considered by economists. b) cannot be accurately determined. c) have no legal meaning. d) refers to the average percentages of taxable income actually paid in taxes.
- State income taxes are deductible on Schedule A. In states that don't have state income taxes, the taxpayers may take another deduction instead (for 2015). What is that deduction? (a) General sales tax (b) Excise tax (c) Alternative minimum tax (d) Socia
- Your company generated $3.0 million in revenue for 2014 and incurred $2.35 million in expenses. a. How much Federal tax due you owe? b. What is your average tax rate? c. What is your marginal tax rate
- Red, White, Blue, and Magenta have taxable income as follows: Blue $ 91,000 White 320,000 Red 800,000 Magenta 50,000,000 a. Calculate the marginal tax rate and the effective tax rate for each of the C corporations. b. Explain why the marginal tax ra
- The current FUTA tax rate is 0.6%, and the SUTA tax rate is 5.4%. Both taxes are applied to the first $7,000 of an employee's pay. Assume that an employee earned total wages of $9,900. What is the amount of total unemployment taxes the employer must pay o
- Immediate post-World War II income tax policy could accurately be said a) to de-emphasize progressive taxation and promote capital investment by high bracket (marginal rate) taxpayers. b) to decrease government reliance on the income tax. c) to emphasi
- The maximum alternative minimum tax rate for individuals is _____. a. less than the maximum regular federal income tax rate for individuals b. equal to the maximum regular federal income tax rate for individuals c. greater than the maximum regular fede
- A taxpayer does not have to pay estimated taxes if: A. The taxpayer's earned income credit will exceed his or her tax liability for the current year. B. The taxpayer's tax liability for the previous year was less than $1,000. C. The taxpayer's withhold
- This year, Mesa Inc.'s before-tax income was $10,752,000. It paid $489,000 in income tax to Minnesota and $427,000 in income tax to Illinois. a. Compute Mesa's federal income tax. b. What is Mesa's tax rate on its income?
- Given the following tax structure: Taxpayer Salary Total Tax Mae $10,000 $ 600 Pedro $20,000 ? What is the minimum tax that Pedro should pay to make the tax structure vertically equitable based on the tax rate paid?
- Kapitol Services Corp estimates that its 2017 taxable income will be $500,000. Thus it is subject to a flat 34% income tax rate and incurs a $170,000 liability. For the following situation, compute Kapitol's 2017 minimum quarterly estimated tax payments
- Kapitol Services Corp estimates that its 2017 taxable income will be $500,000. Thus it is subject to a flat 34% income tax rate and incurs a $170,000 liability. For the following situation, compute Kapitol's 2017 minimum quarterly estimated tax payments t
- Camia Co.'s contribution margin is $200, after-tax income is $96, and the tax rate is 40%. What are the fixed costs? a. $60 b. $50 c. $40 d. None of the above
- Stephanie has a taxable income of $48,200 and a tax liability of $7,913. If Stephanie's income increases by $4,000, her tax liability will be $8,913. a. What is her average tax rate on the $48,200 of income? b. What is her marginal tax rate?
- Assume that income tax expense was $150,000, that income tax payable increased by $14,000, and deferred tax liability increased by $9,000. What amount of cash was paid for income taxes?
- Calculate the cash payment for income taxes for Markowitz Corporation based on the following information: Income tax expense $93,000 Decrease in federal income taxes payable during the year $8,000 Increase in state income taxes payable during the year $1
- Given the following tax structure, Taxpayer Salary Total Tax Mae $ 22,000 $ 1,892 Pedro $ 44,000 $ 4,444 Venita $ 22,000 ??? What tax would need to be assessed on Venita to make the tax horizontally equitable?
- Red, White, Blue & Orange have taxable income as follows: Corporation Taxable Income Red $99,000 White $330,000 Blue $900,000 Orange $40,000,000 A. Calculate the marginal tax rate for each corporation. B. Calculate the effective tax rate for each c
- The alternative minimum tax for a trust or estate is: a. the excess (if any) of the tentative minimum tax for the trust or estate over the tax computed using the regular tax rates b. computed on Form 6251 c. computed without regard to an income distribut
- Which of the following taxpayers benefit most in terms of dollars saved as a result of tax planning to reduce taxes? (a) An individual taxpayer who has a marginal tax rate of 28 percent (b) An individual taxpayer who has an average tax rate of 28 percent
- According to AASB 112, the prepayment of rent of $2,000 that is claimed as a tax deduction immediately upon payment (assuming an income tax rate of 30%) will give rise to: A. a Deferred Tax Liability
- Dan has AGI of $50,000 and paid the following taxes during this tax year. State income tax withholding $1,300 State income tax estimated payments 740 Federal income tax withholding 3,100 Social Se
- Based on a tax system that has been proposed to replace the current tax system, the Value Added Tax system, tax savings strategies to avoid Estate Tax or the Fair Tax Act Proposal. Explain the expected impact on the economy, the IRS and other factors that
- Determine the Taxable Earnings Subject to FUTA Tax. For each of the described pay periods, determine the taxable earnings subject to FUTA tax: NOTE: For simplicity, all calculations throughout this ex
- The table below gives some of the items in the U.S. National Income and Product Accounts in 2017. Item Amount Wages $11,600 Consumption expenditure 16,000 Indirect taxes 2,684 Interest, rent, and profit 6,000 Investments 4,400 Government expenditure 4,000
- Which of the following taxes are likely to be regressive taxes? a. Income taxes based on ability to pay. b. Sales taxes and use taxes. c. Additional sales and use taxes imposed on luxury vehicles. d. None of the above.
- What are the general tax planning concepts that you should consider when evaluating any taxpayer's situation with respect to any tax? a) Maximize the net present value of after-tax wealth for all participants to a tax plan and all taxes affecting the tax
- Compute the taxable income and income tax liability (before credits) for each of the following taxpayers. Each taxpayer uses the standard deduction. a. A widowed taxpayer
- Taxpayer B filed a declaration of estimated tax for the current year and paid $2,000 in four equal installments of $500. He had $6,000 withheld from his salary during the current year. The actual tax for the year was $12,000. B's current-year adjusted gro
- The income tax base for an individual tax return is: a. Adjusted gross income minus from AGI deductions. b. Gross income. c. Realized income from whatever source derived. d. Adjusted gross income.
- An employee earned $62,400 during the year working for an employer. The FICA tax rate for Social Security is 6.2% and the FICA tax rate for Medicare is 1.45%. The current FUTA tax rate is 0.6%, and the SUTA tax rate is 5.4%. Both unemployment taxes are ap
- For disclosing the periodic income tax expense on the income statement, one method advocated by proponents of the net-of-tax method theorize that this method should report: A. income tax expense equal to culvert income tax payable B. only deferred tax a
- Berkley's gross pay for the month is $7,400. His deduction for federal income tax is based on a rate of 18%. He has no voluntary deductions. His yearly pay is under the limit for OASDI. What is Berkley's net pay? (Assume a FICA OASDI Tax of 6.2% and FICA
- If the tax rate is 30% and after-tax profit is $80,000, before-tax profit is (blank).
- Broadening the income tax base and lowering marginal income tax rates provided the intellectual and political foundations for a) the Revenue Act of 1964. b) the Tax Reform Act of 1969. c) the Tax Reform Act of 1986. d) all of the above.
- Congress would like to increase tax revenues by 8.5 percent. Assume that the average taxpayer in the United States earns $59,000 and pays an average tax rate of 20 percent. a. If the income effect is in effect for all taxpayers, what average tax rate w
- Congress would like to increase tax revenues by 13 percent. Assume that the average taxpayer in the United States earns $48,000 and pays an average tax rate of 20 percent. a. If the income effect is in effect for all taxpayers, what average tax rate will
- Congress would like to increase tax revenues by 12.5 percent. Assume that the average taxpayer in the United States earns $63,000 and pays an average tax rate of 20 percent. a. If the income effect is in effect for all taxpayers, what average tax rate wi
- In 2014, its first year of operations, Kimble Corp. has a $760,000 net operating loss when the tax rate is 30%. In 2015, Kimble has $310,000 taxable income and the tax rate remains 30%. Assume the man
- Rich and Shauna Nielson file a joint tax return, and they itemize deductions. Assume their marginal tax rate on ordinary income is 25 percent. The Nielsons incur $2,400 in miscellaneous itemized deduc
- Garrison Shops had a SUTA tax rate of 3.7%. The state s taxable limit was $8,000 of each employee's earnings. For the year, Garrison Shops had FUTA taxable wages of $67,900 and SUTA taxable wages of $83,900. Compute: a. Net FUTA tax b. Net SUTA tax
- Which of the following taxes are likely to be regressive taxes? a) Sales taxes and use taxes. b) Income taxes based on ability to pay. c) Additional sales and use taxes imposed on luxury vehicles. d) None of the above.
- Chuck, a single taxpayer, earns $82,000 in taxable income and $17,750 in interest from an investment in the City of Heflin bonds. (Use the U.S. tax rate schedule.) (Do not round intermediate calculations. Round your answers to 2 decimal places.) a. If Chu
- Congress would like to increase tax revenues by 20 percent. Assume that the average taxpayer in the United States earns $55,000 and pays an average tax rate of 30 percent. If the income effect is in effect for all taxpayers, what average tax rate will res
- Congress would like to increase tax revenues by 11.5 percent. Assume that the average taxpayer in the United States earns $62,000 and pays an average tax rate of 10 percent. If the income effect is in effect for all taxpayers, what average tax rate will r
- Congress would like to increase tax revenues by 17 percent. Assume that the average taxpayer in the United States earns $52,000 and pays an average tax rate of 20 percent. If the income effect is in effect for all taxpayers, what average tax rate will res
- Which of the following is a result of a permanent difference? a. DTA (deferred tax asset). b. DTL (deferred tax liability). c. Effective tax rate equal to the statutory tax rate. d. None of the above.
- In 2013 X and Y have salaries of $35,000 and $27,000, respectively. Their itemized deductions total $8,000. They are married, under 65, and live in a common-law state. a. Compute their taxable income assuming that they file a joint return. b. Compute thei
- Inter-period income tax allocation causes: a. tax expense shown on the income statement to equal the amount of income taxes payable for the current year plus or minus the change in the deferred tax asset or liability balances for the year. b. tax expens
- The income tax base for an individual tax return is: a. Adjusted gross income. b. Gross income. c. Adjusted gross income minus AGI deductions. d. Realized income from whatever source derived.