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-(Table: Taxes, Spending, and Income) Suppose Governor Meridias decides to initiate a state income tax. The first $50,000 of household income is tax-free, while any income above $50,000 is taxed at 10%. The tax rate for a household earning $75,000 is:

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Use the following to answer questions: 
-(Table: Taxes, Spending, and Income) Suppose Governor Meridias decides to initiate a state income tax. The first $50,000 of household income is tax-free, while any income above $50,000 is taxed at 10%. The tax rate for a household earning $75,000 is:

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The first $50,000 of income is tax-free, so the tax is only on the remaining $25,000. The tax rate is 10%, so the tax is $2,500. The tax rate is therefore 2,500 / 75,000 = 3.3%.

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