Exam Exercise One - 4 (Regressive Taxes)
Samantha Taylor has Taxable Income for the current year of $625,000, of which $216,000 is spent on goods and services that are subject to Harmonized Sales Tax (HST) at a rate of 13 percent.Her sister, Martha Taylor, is a part-time student living in the same province and has Taxable Income of $12,000.During the current year, as a result of using some of her savings, she spends $21,400 on goods and services that are all subject to HST.
Determine the effective sales tax rate as a percentage of the income of the two sisters.

Question

Quizplus · Accepted Answer

The Answer of Exam Exercise One - 4 (Regressive Taxes)
Samantha Taylor has Taxable Income for the current year of $625,000, of which $216,000 is spent on goods and services that are subject to Harmonized Sales Tax (HST) at a rate of 13 percent.Her sister, Martha Taylor, is a part-time student living in the same province and has Taxable Income of $12,000.During the current year, as a result of using some of her savings, she spends $21,400 on goods and services that are all subject to HST.
Determine the effective sales tax rate as a percentage of the income of the two sisters.