Asked by Vanessa Recamadas on May 18, 2024
Verified
If James earns $80,000 in taxable income and pays $20,000 in taxes, his average tax rate is 25 percent.
Average Tax Rate
Total taxes paid divided by total income
Taxable Income
The amount of income used to determine how much tax an individual or a company owes to the government in a given tax year.
- Acquire knowledge on the foundational aspects of tax creation and the categories of taxes imposed by state and local governments.
- Explore the fundamental concepts of taxation and how they are applied to ensure fairness and efficiency in taxation.
Verified Answer
BI
Banesa InterianoMay 21, 2024
Final Answer :
True
Explanation :
The average tax rate is calculated by dividing the total taxes paid by the total taxable income. In this case, $20,000 divided by $80,000 equals 0.25, or 25 percent.
Learning Objectives
- Acquire knowledge on the foundational aspects of tax creation and the categories of taxes imposed by state and local governments.
- Explore the fundamental concepts of taxation and how they are applied to ensure fairness and efficiency in taxation.
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