Question

One possible solution to a diminishing Social Security payroll is to increase the Social Security tax by 1.89%. How would such an increase effect the tax on an annual salary of $54,000?

a.
Annual tax would increase by $1,020.60.
b.
Annual tax would increase by $2,327.40.
c.
Annual tax would increase by $3,348.00.
d.
Annual tax would increase by $4,368.60.

Answer 1

The answer would be A).
Multiply $54,000 by 0.0189 to find out how much the tax would be increased by.
You get 1020.60

Answer 2

Answer: Option "A" is correct.

Explanation:

Since we have given that

Annual salary = $54000

Tax of Social Security = 1.89%

Since there is only one possible solution to a diminishing Social Security payroll is to increase the Social Security tax by 1.89%.

Annual tax would increase by

`(1.89)/(100)* 54000\\\\=(1.89* 54000)/(100)\\\\=\$1020.6`

Hence, Option "A" is correct.