Functions defined on intervals
Income Tax (I)
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An important source of revenue for the state is the
income tax collected from its citizens and residents, who
are required by law to transfer part of their income
to the state. Different countries have different
ways to determine the amount of tax paid
by people with different incomes, and tax
structure is always controversial. Working on this
task, you will encounter some of the important concepts
used to discuss taxes and will analyze
some of the issues related to tax structure.
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In Candyland, the tax structure is relatively simple.
As in most countries, income tax is progressive,
so that people with higher income pay a larger share of their
income as income tax.
Candyland has two
tax brackets: one for those with a yearly income
of up to 500 Marshmellows (the local currency), and a second
for those with a yearly income of more than 500 Marhsmellows.
The tax structure is shown in the table. The tool below the table
shows how the tax is computed.
You can also examine a graphic representation
of the tax structure in the
Income tax tool.
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Tax structure in Candyland
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| Up to 500 Marhmellows |
20% |
| Above 500 Marshmellows |
60% |
The Candyland treasury wants to revise the income-tax structure
and has submitted four reform proposals to a vote by the citizens (see below).
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Describe the new tax structure according to each of the proposals.
Use the
Income tax tool
and/or the general Functions on intervals tool for help.
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Compare the different plans. Can you predict how people in various income brackets will
vote?
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Proposal A
Expand the first tax bracket to 750 Marhmellows
so that the tax rate for income up to 750 Marhmellows is 20%.
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Proposal B
A flat tax of 35% on all income levels.
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Proposal C
Decrease the tax rate to 10%
in the first bracket and to 50% in the second.
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Plan D
All taxpayers recieve a 70 Marshmellow tax credit, that is,
70 Marshmellows are deducted from their income tax.
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