+73 Dr. Jones lives in a country with a progressive tax system. That is, he does not pay any taxes on the first $20,000 in income he makes, he pays 5% taxes on the next $25,000, he pays 10% taxes on the next $35,000, he pays 15% on the next $50,000, and he pays 20% on every additional dollar onwards. If Dr. Jones pays $10,000 in taxes, then how much income does he make?
Any help appreciated!
+251 The answer is $105,000.
Here's how we can solve this problem:
We know that Dr. Jones pays $10,000 in taxes, so we can start by subtracting this amount from his total income.
We also know that Dr. Jones does not pay any taxes on the first $20,000 of his income, so we can subtract this amount as well.
Now we are left with the amount of income that Dr. Jones pays taxes on. We can calculate the taxes on each income bracket and add them up until we reach the total amount of taxes that Dr. Jones pays.
Here's the calculation:
Total income = $10,000 (taxes) + $20,000 (non-taxable income) + $x (taxable income) Taxes paid
5% of $25,000 + 10% of $35,000 + 15% of $50,000 + 20% of $x $10,000
= $1,250 + $3,500 + $7,500 + 0.20x 0.20x
= $10,000 - $1,250 - $3,500 - $7,500 0.20x = $1,750 x = $1,750 / 0.20 x = $8,750
Therefore, Dr. Jones' total income is:
$10,000 (taxes) + $20,000 (non-taxable income) + $8,750 (taxable income) = $105,000
