Answer to Question #276751 in Microeconomics for Anna

Question

Under a proportional tax system, Karl pays $30,250 on a salary of $275,000. Jan pays $36,300 in taxes which means Jan’s salary is:

A. $325,000.

B. $275,000.

C. $330,000.

D. $350,000.

Answer 1

• The answer is C. $330,000.

Under a proportional tax, all taxpayers pay a similar percentage of their incomes.

If Karl pays $30,250 on a salary of $275,000, then the percentage of the tax will be given as follows:

• 30,250/275,000 = 0.11 = 11%

Jan also pays 11% proportional tax.

• 11% = 36,300
• What about 100%
• (100/11) *36,300 = $330,000