Mr Ohno Owns and Operates a Part-Time Service Business That

question 69

Essay

Mr Ohno owns and operates a part-time service business that generates $80,000 annual taxable income. His federal tax rate on this income is 17%. Because of recent legislation, this rate will increase to 25% next year.
A. Based on a static forecast, how much additional revenue will the federal government collect from Mr Ohno next year?
B. How much additional revenue will the federal government collect if Mr Ohno decides to work fewer hours and consequently earns only $50,000 next year?

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Definitions:

Dermis

The thick layer of living tissue below the epidermis containing hair follicles, sweat glands, and providing mechanical strength to the skin.

True Skin

Another term for the dermis, the layer of skin located beneath the epidermis, containing nerve endings, sweat glands, and blood vessels.

Hypo-

A prefix meaning low, under, beneath, down, or below normal, often used in medical terms.

Hyper-

A prefix meaning excessive or above normal, often used in medical terms to describe conditions involving overactivity.