Table 12-8

-Refer to Table 12-8.If the government imposes a $2,000 lump-sum tax,the average tax rate for Marcia and Charles would be
A) 5 percent and 6.7 percent, respectively.
B) 8 percent and 6 percent, respectively.
C) 12 percent and 9 percent, respectively.
D) 13 percent and 10 percent, respectively.

Question

Table 12-8
 
-Refer to Table 12-8.If the government imposes a $2,000 lump-sum tax,the average tax rate for Marcia and Charles would be
A) 5 percent and 6.7 percent, respectively. 
B) 8 percent and 6 percent, respectively. 
C) 12 percent and 9 percent, respectively. 
D) 13 percent and 10 percent, respectively.

Quizplus · Accepted Answer

A lump-sum tax is a fixed amount, so the average tax rate is calculated by dividing the tax amount by income. If Marcia and Charles have different incomes, the average tax rate will differ. The correct rates are 5% for Marcia and 6.7% for Charles.

Table 12-8 -Refer to Table 12-8.If the Government Imposes a $2,000 Lump-Sum