There is a 20% tax on the first $15,000 of income,a 30% tax on income above $15,000 until $30,000,and a 40% tax on all income above $30,000.What is the average tax rate for someone making $35,000?

Question

Quizplus · Accepted Answer

To calculate the average tax rate, we divide the total tax paid by the total income.

For the first $15,000 of income, the tax is 20%, so the tax paid is:
$15,000 * 0.20 = $3,000

For the next $15,000 of income, the tax is 30%, so the tax paid is:
($30,000 - $15,000) * 0.30 = $4,500

For the remaining $5,000 of income, the tax is 40%, so the tax paid is:
$5,000 * 0.40 = $2,000

The total tax paid is $3,000 + $4,500 + $2,000 = $9,500

The total income is $35,000.

So, the average tax rate is:
$9,500 / $35,000 = 0.2714

Therefore, the average tax rate is 27.1%.

The best choice is C.

There Is a 20% Tax on the First $15,000 of Income,a