88.7k views
4 votes
Give an example to illustrate the difference between "paying more in taxes ” and paying a higher tax rate .

1 Answer

2 votes

Final answer:

The difference between paying more in taxes and paying a higher tax rate can be illustrated with an example. One individual may pay a lower amount of taxes compared to another individual, but the second individual may have a higher tax rate. In this example, the second individual is paying more in taxes (total amount), but the first individual is paying a higher tax rate (percentage of income).

Step-by-step explanation:

The difference between paying more in taxes and paying a higher tax rate can be illustrated with an example. Let's consider two individuals, one earning $20,000 per year and the other earning $200,000 per year. The first individual may pay a lower amount of taxes compared to the second individual, but the second individual may have a higher tax rate.

For instance, the first individual may pay $2,000 in taxes at a 10% tax rate, while the second individual may pay $50,000 in taxes at a 25% tax rate. In this example, the second individual is paying more in taxes (total amount), but the first individual is paying a higher tax rate (percentage of income).

User Auto
by
8.0k points

No related questions found

Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.