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Tony, Juan, and Isabel live in a city where the combined state and local sales tax rate is 8%. They each purchased the same computer and paid $160 in sales tax. A 5-column table has 3 rows. The first column has entries Tony, Juan, Isabel. The second column is labeled Income with entries 10,000, 50,000, 75,000. The third column is labeled Cost of computer with entries 2,000, 2,000, 2,000. The fourth column is labeled Sales tax paid with entries 160, 160, 160. The fifth column is labeled tax rate with entries 1.6 percent, 0.32 percent, and 0.21 percent. This scenario describes a tax system. Isabel pays Tony and Juan on the computer. pays the highest tax rate on the computer. would be the most affected by an increase in the sales tax rate.

Respuesta :

sebastiansierraocm

Answer:

Tony pays the highest tax rate on the computer, not based on the nominal sales tax rate, but on the percentage that the tax represents of his total income.

His income is $10,000, and he pays $160 in sales tax, for an effective rate of 1.6%.

The person who would be the most affected by an increase in the sales tax rate is again, Tony, simply because he has the lowest income. Juan and Isabel would also be affected by a sales tax increase, but on a much lower scale (because their incomes are also a lot larger).

anthougo

a) The scenario described by the 5-column table with 3 rows showed that Tony paid the highest tax rate (effective) on the computer, based on his income level.

b) Tony would be the most affected by an increase in the sales tax rate because his effective tax rate would increase, causing him to suffer the most.

What is a sales tax?

A sales tax is a proportional tax that charges the same percentage on the consumption of goods and services without considering a person's income level.

Data and Calculations:

Tax Payer    Income      Cost of Computer   Sales Tax Paid   Tax Rate

Tony          $10,000              $2,000                      $160           1.6%

Juan           50,000                 2,000                        160           0.32%

Isabel         75,000                 2,000                        160           0.21% ($160/$75,000 x 100)

Thus, this scenario of a tax system illustrates that sales tax is not progressive, but it is proportional since it is based on consumption and not income level.

Learn more about sales taxes at https://brainly.com/question/9437038

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