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Unformatted text preview: ARE 201 Name _____KEY__________________________ Lab #5 Compete the sentence or work the problem. 1. Total taxes paid divided by the taxpayer's income is the _average_______ tax rate. 2. The change in taxes paid divided by the change in the taxpayer's income the marginal________ tax rate. 3. Gross income minus personal exemptions and minus deductions equals taxable_________ income. 4. A type of tax system where the tax paid as a percentage of the taxpayer's income rises as the taxpayer's income rises is a __progressive_______________ tax system. 5. A type of tax system where the tax paid as a percentage of the taxpayer's income falls as the taxpayer's income changes is a __regressive__________________ tax system. 6. A type of tax system where the tax paid as a percentage of the taxpayer's income doesn't change as the taxpayer's income changes is a __proportional_____________ tax system. Use the following information to answer questions 7 to 10. Stan Ludlow's gross income is $60,000, and he files taxes as a single person. He uses the personal exemption of $4000 and has deductions of $6000. The following tax brackets are applicable to him. Taxable income range Tax rate $0 to $10,000 0.10 $10,001 to $30,000 0.20 $30,001 and above 0.30 7. Stan's taxable income is ___$50,000____________________. 8. The total income tax that Stan pays is ___$11,000____________________. 9. Stan's average tax rate is ___18.3% or .183_______________________. 10. Stan's marginal tax rate is ____30% or .30_______________________. ...
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- Fall '08