Simple progressive income tax-standard deduction

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Reference no: EM13923665

Assume that there is a very simple progressive income tax in the country. The marginal tax rate is 10% for income over $5000 to $10,000. It is 20% for income over $10,000 to $25,000, and it is 30% for income over $25,000.

a) How much tax will Jerry pay if his income is $7000? How much will Bob pay, who has an income of $18,000? How much will Greg pay with an income of $40,000?

b) How would your answer in part a) change if there is a $3000 standard deduction?

c) How would your answer in part a) change if there is a $1000 refundable tax credit?

Reference no: EM13923665

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