1. Calculate the percentage of income paid in taxes at each income level in the

Question

1. Calculate the percentage of income paid in taxes at each income level in the following table:

Income

Taxes Paid

Tax Rate

$30,000

$1,500

$60,000

$6,000

$100,000

$15,000

$150,000

$30,000

2. The income tax system in the table above is:

Progressive

Regressive

Proportional

3. What types of taxes does both an employee have to pay (which gets withheld from their paycheck) and the employer also has to pay (on behalf of each employee)?

Income

Taxes Paid

Tax Rate

$30,000

$1,500

$60,000

$6,000

$100,000

$15,000

$150,000

$30,000

Explanation / Answer

1) a) Tax rate = 1500/30000 * 100 = 5%

b) Tax rate = 6000/60000 * 100 = 10%

c) Tax rate = 15000/100000 * 100 = 15%

d) Tax rate = 30000/150000 * 100 = 20%

2) Progressive

3)Pension funds, Payroll tax

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