Consider two people, Sandy Smith, who earns $25,000, and Gary Carver, who earns $50,000. If the government has decided to tax everyone's first $25,000 at 20 percent and everyone's second $25,000 at 40 percent, then Gary pays:

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Gary pays $10,000 in taxes on his first $25,000 (20% * $25,000) and $5,000 in taxes on his second $25,000 (40% * $25,000), for a total of $15,000 in taxes. Sandy pays $5,000 in taxes on her first $25,000 (20% * $25,000) and $0 in taxes on her second $25,000 (40% * $0), for a total of $5,000 in taxes.

Consider Two People, Sandy Smith, Who Earns $25,000, and Gary