2. Problems and Applications Q5 Suppose that your state raises - 2 Problems and Applications Q5 Suppose that your state raises its sales tax from

# 2. Problems and Applications Q5 Suppose that your state raises

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2. Problems and Applications Q5 Suppose that your state raises its sales tax from 5 percent to 6 percent. The state revenue commissioner forecasts a 20 percent increase in sales tax revenue. Which of the following are plausible as a result of this increase in the sales tax? Check all that apply. The sales tax revenue will increase by 20%. The sales tax revenue will increase by less than 20%. The sales tax revenue will increase by more than 20%. Grade It Now Save & Continue Continue without saving Type here to search 2. Taxes paid for a given income level Ana is getting ready to do her taxes. She is single and lives in Miami. Ana earned \$250,000 in taxable income in 2015. She reviews the following table, which shows the IRS tax rates for a single taxpayer in 2015. The Tax Rate Is... (Percent) 10.0 15.0 On Annual Taxable Income... Up to \$9,225 From \$9,225 to \$37,450 From \$37,450 to \$90,750 From \$90,750 to \$189,300 From \$189,300 to \$411,500 From \$411,500 to \$413,200 Over \$413,200 35.0 39.6 Based on the IRS table, Ana calculates that her marginal tax rate is 33% when her annual taxable income is \$250,000. Ana calculates that she owes in income taxes for 2015. Type here to search O e Over \$413,200 39.6 Based on the IRS table, Ana calculates that her marginal tax rate is 33% when her annual taxable
income is \$250,000. Ana calculates that she owes in income taxes for 2015. Ana then calculates that her average tax rate is based on the annual income level and the amount of taxes she owes for 2015. After figuring out what she owes in taxes in 2015, Ana decides to ask an accountant for tax advice. The accountant claims that he has found a legal way to shelter \$4,000 of taxable income from the federal government. The maximum amount that Ana is willing to pay to learn this strategy and reduce her taxable income by \$4,000 is (Hint: Sheltering some income means finding a legal way to avoid being charged income tax on that income. For example, someone who has \$50,000 in taxable income and shelters \$10,000 pays income tax on only \$40,000.) Grade It Now Save & Continue Continue without saving Type here to search