Exhibit 9-1 A flat tax plan allows individuals to deduct a standard allowance of $25,000 from their wages.Assume that the flat tax rate is 12%.
Refer to Exhibit 9-1.How much income tax would you have to pay if you were earning $100,000 a year?

Question

Quizplus · Accepted Answer

The standard allowance of $25,000 is deducted from the income of $100,000, leaving $75,000 taxable. The tax rate is 12%, so the tax owed is $75,000 x 0.12 = $9,000.

Exhibit 9-1 a Flat Tax Plan Allows Individuals to Deduct