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Suppose the U.S. has a proportional income tax system. The flat rate is 15%, but a taxpayer's first $25,000 is exempt from federal tax. Therefore, if Jim made a gross income of $80,000 las year, what would be his tax liability? Also, if Jim paid $9,250 in taxes throughout the year, what will be his refund/payment when he reconciles his taxes on April 15?
Liability of $8,250; payment of 1,000
Liability of $12,000; refund of 2,750
Liability of $12,000; payment of 2,750
Liability of $8,250; refund of 1,000
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