High-income bracket. The expression 90,514.5 +(plus) 0.35(x - (minus) 311,950)
represents the amount for the 2003 federal income tax in dollars for a single taxpayer with x dollars of taxable income, where x is over $311,950 (www.irs.gov).
a) Simplify the expression.
b) Use the graph in the accompanying figure to estimate
the amount of tax for a single taxpayer with a taxable
income of $450,000.
c) Find the amount of tax for MLB player Alex Rodriguez
for 2003. At $22 million he was the highest paid baseball
player that year (www.usatoday.com).
a. Income tax is computed in layers. Every tax payer receives the benefit of the lower % layers of tax. Below is the 2005 tax table, and if you were to compute each layer, you would agree that is true. For your simplified ...
The solution explains how tax brackets work, and uses baseball player Alex Rodriguez's huge salary to compute a high income taxpayer's tax liability.