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# High-Income Bracket calculations and explanations: ARod

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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).

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#### Solution Preview

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 ...

#### Solution Summary

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.

\$2.19