According to the U.S.Federal Tax Rates chart from the textbook (Figure 15.6),a person earning $100,000 in a given year is in the 28 percent tax bracket.How much will this individual owe in taxes for that year?

Question

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According to the tax chart, the first $9,525 of income is taxed at 10%, the next $29,175 is taxed at 12%, and the remaining $61,300 is taxed at 22%. Therefore, the individual will owe 10% of $9,525 ($952.50), 12% of $29,175 ($3,501), and 22% of $61,300 ($13,486), for a total of $17,939.50 in taxes. This is less than $28,000 but greater than $15,000, so the answer is D.