Suppose that a new federal tax relief act allows you to pay a 17% income tax rate instead of 32%. If your taxable inxome at the end of the year is $96,000, how much have you saved in tax dollars because of the new tax relief act?

Question

Macie Cobb

Mathematics

19 May, 16:13

Suppose that a new federal tax relief act allows you to pay a 17% income tax rate instead of 32%. If your taxable inxome at the end of the year is $96,000, how much have you saved in tax dollars because of the new tax relief act?

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Imani Ashley · Answer 1

This will require solving two equations

96,000*.17 = 16,320

96,000*.32 = 30,720

This represents the total tax paid at both of the tax rates.

30,720 - 16,320 = 14,400

This represents the difference between the two tax rates at 96k income. This is the total savings between the tax rates.