Mission Company Has Three Employees $\text { The company is subject to the following taxes: }$

question 4

Multiple Choice

Mission Company has three employees: $\begin{array}{l}&\text { Gross Pay through July}&\text { Gross Pay for August }\\\text { Smith } & \$ 3,200 & \$ 1,000 \\\text { Cain } & 25,800 & 3,500 \\\text { Clark } & 94,600 & 13,100\end{array}$
$\text { The company is subject to the following taxes: }$ $$\begin{array} { l c l } \text { Tax } & \text { Rate } & \text { Applied To } \\\text { FICA-Social Security } & 6.20 \% & \text { First } \$ 106,800 \\\text { FICA-Medicare } & 1.45 & \text { All gross pay } \\\text { FUTA } & .80 & \text { First } \$ 7,000 \\\text { SUTA } & 5.40 & \text { First } \$ 7,000\end{array}$$ What are Mission Company's total August payroll taxes for Clark?

• A) $ 946.35
• B) $1,002.15
• C) $1,814.35
• D) $6,234.75
• E) $812.20

Understand the concepts of progressive, regressive, and proportional taxation.

Identify the major sources of federal and state revenue.

Calculate personal income tax and understand the concept of marginal tax rate.

Differentiate between the financial burden of different types of taxes on various income groups.

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Definitions:

Resource Suppliers

Entities or individuals that provide the essential inputs required for the production of goods and services, such as labor, raw materials, and capital.

Capitalist Income

Income generated through the ownership of capital assets like businesses, stocks, or real estate, often distinguishing the earnings of capitalists from laborers.

Economic Rent

The excess payment or profit made over the minimum amount required to bring a factor of production into use.