Compute the Tax Rates for the Three Taxpayers Shown in Table

question 54

Multiple Choice

Compute the tax rates for the three taxpayers shown in Table 33.1.Then use the table to answer the indicated question.
$\begin{array}{c}\text { Taxpayer } & \begin{array}{c}\text { Income } \\\text { (Dollars) }\end{array} & \begin{array}{c}\text { Taxable } \\\text { Income } \\\text { (Dollars) }\end{array} & \begin{array}{c}\text { Taxes } \\\text { Paid } \\\text { (Dollars) }\end{array} & \begin{array}{c}\text { Effective } \\\text { Tax Rate } \\\text { (Percent) }\end{array} & \begin{array}{c}\text { Nominal } \\\text { Tax Rate } \\\text { (Percent) }\end{array} \\\hline 1 & \$ 200,000 & \$ 100,000 & \$ 6,000 & -\%& -\% \\2 & 100,000 & 80,000 & 8,000 & -\%&-\% \\3 & 60,000 & 48,000 & 12,000 & -\% & -\%&\end{array}$
Table 33.1
Taxable Income and Tax Computations In Table 33.1, the nominal tax rate for taxpayer 3 is

• A) 5.0 percent.
• B) 12.5 percent.
• C) 20.0 percent.
• D) 25.0 percent.

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