Question

The state tax rate on 1973 incomes was 2% on the first $1000 of income subject to tax and 3% on the next $2000 or any part thereof. By special law, the State allowed a deduction of 1/4 of the tax computed on the above schedule. In 1973, $1800 of Mr. Brown's income was subject to tax. What was the amount of his tax? A) $11 B) $27 C) $33 D) $9

Answer 1

Answer: C) $33

Explanation:

1973 tax rate :

2% on the first $1000 income

3% on next $2000 or any part thereof ;

Brown's total income of $1800

2% of $1000

0.02 × $1000 = $20

3% of $800

0.03 × 800 = $24

Total tax = $(20 + 24) = $44

1/4 tax deduction:

(1/4) of total tax

(1/4) × $44

0.25 × $44

= $11

Total tax - tax deduction

$44 - $11 = $33

Tax amount = $33