If the personal income tax rate is lowered from 40% to 33%, what is the differential savings for a tax payer having an annual income before tax to the tune of $45000?
A. $3500
B. $5000
C. $3150
D. $7000
E. $10000
AO is C
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Since 40% - 33% = 7%, the taxpayer will save 7% of annual income:Roland2rule wrote:If the personal income tax rate is lowered from 40% to 33%, what is the differential savings for a tax payer having an annual income before tax to the tune of $45000?
A. $3500
B. $5000
C. $3150
D. $7000
E. $10000
(7/100)(45000) = 3150.
The correct answer is C.
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The savings for a taxpayer is:BTGmoderatorRO wrote:If the personal income tax rate is lowered from 40% to 33%, what is the differential savings for a tax payer having an annual income before tax to the tune of $45000?
A. $3500
B. $5000
C. $3150
D. $7000
E. $10000
0.4(45,000) - 0.33(45,000)
45,000(0.4 - 0.33)
45,000(0.07) = 3,150
Answer: C
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