Question

A certain state uses the following progressive
tax rate for calculating individual income tax:
Income
Progressive
Tax Rate
Range ($) 0-2000 2001 – 9000 9001 and up Calculate the state income tax owed on a$50,000
per year salary.
tax = $[?] Round your answer to the nearest whole dollar amount. 2% 5% 5.4% Answers 1. diemkieu The state income tax owed on$50,000 per year salary is $2,604 What is progressive tax? Progressive tax system charges individual’s earnings to taxes with higher tax rates as the earnings increase. In this case, the first$2000 is charged to tax at 2%, the next $7000($9000-$2000) is charged to tax at 5% and any amount above$9,000 has tax rate of 5.4%, evidently, higher tax rates apply higher income thresholds.
Tax on the first $2000=$2000*2%
Tax on the first $2000=$40
Tax on the next $7000=$7000*5%
Tax on the next $700=$350
Tax on the balance above $9000=($50000-$9000)*5.4% Tax on the balance above$9000=$41,000*5.4% Tax on the balance above$9000=$2,214 Total taxes owed on$50,000 yearly salary=$40+$350+$2,214 Total taxes owed on$50,000 yearly salary=\$2,604
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