Country M levies a 10 percent excise tax on the retail price of any automobile purchased in the country. This year, the aggregate purchase price subject to tax was $7.9 million, so current year revenue was $790,000. Country M plans to increase the tax rate next year to 11 percent.
Compute next year’s excise tax revenue assuming next year’s tax base equals the current year base.
Compute next year’s excise tax revenue assuming next year’s tax base increases to $9.2 million.
Compute next year’s excise tax revenue assuming next year’s tax base decreases to $6.9 million.
Jurisdiction X levies a flat 15 percent tax on individual income in excess of $35,000 per year. Individuals who earn $35,000 or less pay no income tax.
Mr. Hill earned $91,200 income this year. Compute his income tax and determine his average and marginal tax rate.
Ms. Lui earned $43,100 income this year. Compute her income tax and determine her average and marginal tax rate.
Ms. Archer earned $31,400 income this year and paid no income tax. Describe her average and marginal tax rate.
What type of rate structure does Jurisdiction X use for its individual income tax?