The state tax rate on 1973 incomes was 2% on the first $1000 of income subject to tax and 3% on the next $2000 or any part thereof. By special law, the state allowed a deduction of 1/4 of the tax computed on the above schedule. In 1973, $1800 of Mr. Brown's income was subject to tax. What was the amount of his tax?
a) $11
b)$27
c)$33
d)$9
To calculate Mr. Brown's tax, we need to follow the given tax rate schedule and deduction.
Step 1: Calculate the tax on the first $1000 of income subject to tax at a rate of 2%.
Tax on $1000 = 1000 * 0.02 = $20
Step 2: Calculate the tax on the next $800 of income subject to tax at a rate of 3%.
Tax on $800 = 800 * 0.03 = $24
Step 3: Add the taxes calculated in Step 1 and Step 2.
Total tax = $20 + $24 = $44
Step 4: Calculate the deduction provided by the state, which is 1/4 of the tax computed above.
Deduction = $44 * 1/4 = $11
Step 5: Subtract the deduction from the total tax to get the final tax amount.
Final tax = $44 - $11 = $33
Therefore, the amount of Mr. Brown's tax in 1973 is $33. Hence, the answer is option c) $33.