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Given the following tax structure, what minimum tax would need to be assessed on Shameika to make the tax progressive with respect to effective tax rates?Taxpayer Salary Muni-Bond Interest Total TaxMihwah $22,500 $4,850 $1,665 Shameika $87,500 $40,000 ???

Respuesta :

abiolataiwo2015

Answer:

$6,475

Explanation:

Calculation for the minimum tax

The following details were given

Taxpayer Salary Muni-Bond Interest

Total Tax

Mihwah $22,500 $4,850 $1,665

Shameika $87,500 $40,000 ???

First step is to find Mihwah’s average tax

using this formula

Mihwah’s average tax rate =Total tax / Taxable income

Let plug in the formula

Mihwah’s average tax rate=$1,665/$22,500

Mihwah’s average tax rate=0.074×100

Mihwah’s average tax rate=7.4%

Second step is to calculate for the minimum tax

7.4% average tax rate on Shameika’s $87,500 taxable income will give us the minimum tax

Hence,

Minimum tax=7.4%×$87,500

Minimum tax=$6,475

Therefore the minimum tax would need to be assessed on Shameika to make the tax progressive with respect to effective tax rates will be $6,475

The minimum tax should be $6,475

  • The calculation is as follows:

Mihwah’s average tax rate =Total tax ÷ Taxable income

=$1,665 ÷$22,500

=0.074×100

=7.4%

Now the minimum tax should be

=7.4%×$87,500

=$6,475

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