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20 June, 13:40

In a certain jurisdiction, John who is earning $35,000 currently pays a flat percentage of 15% in income tax. The tax

authorities suggest a change to a progressive income tax system, where the rules for taxation are as follows:

1. Charging 10% on a person's income up to $20,000

2. Charging 30% on any income above that

How much more will john be paying in income tax under the proposed changes? Give your answer in dollars to the nearest

dollar.

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Answers (1)
  1. 20 June, 17:12
    0
    Answer: $1,250

    Step-by-step explanation:

    Flat percentage income tax: $35,000 * 0.15 = $5,250

    Progressive income tax: $20,000 * 0.10 + $15,000 * 0.30 = $6,500

    The difference between the two tax rates: $6,500 - $5,250 = $1,250
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