Post a New Question

Economics

posted by .

Suppose that the Government runs a pension fund to which all workers must contribute. The employee contribution rate is 6.2 percent on the first $84,900 of income. All income in excess of $84,900 is not taxed for pension purposes. What was the effective pension tax rate for a person earning $169,800?

Calculate the tax and divide by the income. Tax = .062*84900 = 5263.8.
Average rate = tax/income = .031 = 3.1%

Respond to this Question

First Name
School Subject
Your Answer

Similar Questions

  1. Linear Programming Investment Strategy

    How can I set this question up? Client has 800,000 that must be invested in 3 funds. 20 to 40% invested in growth fund, 20 to 50% in income fund and at least 30% in money market fund. Client has a max risk index of 0.05. Risk indicators
  2. Economics

    Suppose that the Government runs a pension fund to which all workers must contribute. The employee contribution rate is 6.2 percent on the first $84,900 of income. All income in excess of $84,900 is not taxed for pension purposes. …
  3. Intermediate Accounting

    Accounting Homework Question: Pension Amendment Case Charles Rubin is a 30-year old employee of General Motors. Charles was pleased with recent negotiations between his employer and the United Auto Workers. Among other favorable provisions …
  4. ECONOMICS

    Suppose you are a typical person in the U.S. economy. You pay 4 percent of your income in state income tax and 15.3 percent of your labor earnings in federal payroll taxes (employer and employee shares combined). You also pay federal …
  5. finance

    Th e First National Bank of Great Falls is considering a leveraged lease agreement involving some mining equipment with the Big Sky Mining Corporation. Th e bank (40 percent tax bracket) will be the lessor; the mining company, the …
  6. Economics

    Taxable income is A) total income less deductions and exemptions. B) earned income less property income. C) all income other than wages and salaries. D) wage and salary income only. E) all earned income is it a?
  7. Math

    A certain country taxes the first $20,000 of an individual's income at a rate of 15%, and all income over $20,000 is taxed at 20%. a. Al makes $16,000. Betty makes $36,000. How much is each taxed?
  8. accounting

    In recent years, there has been a lot of media coverage about the funding status of pension plans for state employees. In many states, the amount of money invested in employee pension plans is far less than the amount estimated to …
  9. Economics

    Some people would prefer a single income tax rate because it?
  10. Business Math

    Martha earns a gross salary of N$ 40,000 per month. The following deductions come off her gross salary: income tax 28%, pension fund 10%, medical aid fund 5%. a) How much (in N$) does Martha pay in income tax?

More Similar Questions

Post a New Question