Exhibit 9-1 A flat tax plan allows individuals to deduct a standard allowance of $25,000 from their wages.Assume that the flat tax rate is 12%.
Refer to Exhibit 9-1.How much income tax would you have to pay if you were earning $50,000 a year?

Question

Quizplus · Accepted Answer

To calculate the income tax, we need to first subtract the standard deduction of $25,000 from the income of $50,000, which leaves us with $25,000 taxable income. Multiplying $25,000 by the flat tax rate of 12% gives us an income tax of $3,000 ([$25,000 x 12%] = $3,000). Therefore, the correct answer is C.

Exhibit 9-1 a Flat Tax Plan Allows Individuals to Deduct