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# Consider the following tax structure Mr Smith has an income of

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Consider the following tax structure: Mr. Smith has an
income of \$2500 per annum. Calculate his tax bill for the
year. What is his average tax rate? His highest marginal
tax rate?
Solution
Hi,
Tax upto \$1500 = 0
Tax up \$2000 = 14%*2000
=280
Tax for \$(2500-2000) = 500*20%
=\$100
Total Tax = \$(280+100)
=\$380
Average Tax Rate = 380/2500
=15.20%

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Consider the following tax structure: Mr. Smith has an income of \$2500 per annum. Calculate his tax bill for the year. What is his average tax rate? His highest marginal tax rate? Solution Hi, Please find the correct answer as follows: Tax upto \$1500 = 0 Tax up \$2000 = 14%*2000 =280 Tax for \$(2500-2000) = 500*20% =\$100 Total Tax = \$(280+100) =\$380 Average Tax Rate = 380/2500 =15.20% Name: Description: ...
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