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I https://ng.cengage.com/static/nb/ui/evo/index.htmi?deploymentid-557259188102130367407367849738 MNDTAP From Cengage Apla Homework: Economic Decision Makers to Average: 12 10. Computing and Interpreting average tax rates In a hypothetical economy, Hubert earns $17,000, Kate earns $34,000, and Manuel earns $51,000 in annual income. The annual taxable income and tax liability for these three single individuals. For example, Hubert, who earns $17,000, owes $5,610 in taxes Use the tax liability figures provided to complete the following table by computing the average tax rate for income or $17,000, $34,000, and $51,000, respectively. Average Tax Rate (Percent) Taxable Income (Dollars) 17,000 34,000 51,000 Tax Liability (Dollars) 5,610 7,820 9,180 Manuel The income tax system for this country is

Explanation / Answer

Average tax rate = Tax liability / Taxable income

The income tax system for this economy is Regressive .

Taxable income Taxable income (dollars) Tax liability (Dollars) Average tax rate (Percent) Hubert 17,000 5610 5610/17,000=0.33 =33% Kate 34,000 7820 7820/34,000= 0.23 = 23% Manuel 51,000 9180 9180/51,000= 0.18 =18%

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