Compute the Tax Rates for the Three Taxpayers Shown in Table

question 35

Multiple Choice

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

$\text {Table \(33.1\) }$
$\text {Taxable Income and Tax Computations}$
In Table 32.1, the effective tax rate for taxpayer 3 is

• A)5.0 percent.
• B)8.0 percent.
• C)20.0 percent.
• D)25.0 percent.

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Definitions:

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