Question

If personal income up to and including $25,000 is not taxed, income of $25,001 to $50,000 is taxed at 10%, and income over $50,000 is taxed at 20%, then a family earning an income of $75,000 will pay a n AVERAGE tax rate of _____%.

Answer 1

10%

Step-by-step explanation:

The average tax rate is the total amount of tax divided by total taxable income.

Since the family's income is $75,000, they will pay a tax of 10% for the first $50,000, then for the remaining $25,000 they will not be charged.

Therefore their average tax is the tax paid for the first $50000 which is 10%.

10/100 * 50000 = 5000

Avg tax = 5000/50000 = 10%