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A certain tax policy states that the first $50 000 of income is taxed at5% and any income above $50 000 is taxed at 12%.a) Calculate the tax on $125 000.b) Write a function that models the tax policy.

Question

A certain tax policy states that the first 50000ofincomeistaxedat550 000 of income is taxed at5% and any income above 50 000 is taxed at 12%.a) Calculate the tax on $125 000.b) Write a function that models the tax policy.

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Solution

a) To calculate the tax on $125,000, we first need to determine how much of this income is taxed at 5% and how much is taxed at 12%.

The first 50,000istaxedat550,000 is taxed at 5%. So, the tax on this portion of the income is 50,000 * 0.05 = $2,500.

The remaining income above 50,000is50,000 is 125,000 - 50,000=50,000 = 75,000. This portion is taxed at 12%, so the tax on this portion is 75,000∗0.12=75,000 * 0.12 = 9,000.

The total tax is therefore 2,500+2,500 + 9,000 = $11,500.

b) We can model this tax policy with a function in Python:

def tax(income):
    if income <= 50000:
        return income * 0.05
    else:
        return 50000 * 0.05 + (income - 50000) * 0.12

This function takes an income as input. If the income is less than or equal to 50,000,itreturns550,000, it returns 5% of the income as tax. If the income is more than 50,000, it calculates the tax as 5% of 50,000plus1250,000 plus 12% of the income above 50,000.

This problem has been solved

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