How tax affects your income

Jack has an income of $30,000 and Emily has an income of $60,000. Calculate Jack and Emily’s income tax in each of the following situations.

Situation one – flat tax

Flat tax calculation: Jack

  • Income: $30,000
  • Flat tax rate: 15%
  • Calculate income tax
  • Calculate income after paying tax

Flat tax calculation: Emily

  • Income: $60,000
  • Flat tax rate: 15%
  • Calculate income tax
  • Calculate income after paying tax
Situation two – progressive tax

Progressive tax calculation: Jack

  • Income: $30,000
  • Tax rate on the first $20,000 of income: 15%
  • Calculate the tax on the first $20,000 of income
  • Tax rate on income over $20,000: 25%
  • Calculate income tax on income over $20,000
  • Calculate total income tax
  • Calculate income after paying tax

Progressive tax calculation: Emily

  • Income: $60,000.
  • Tax rate on the first $20,000 of income: 15%
  • Calculate the tax on the first $20,000 of income
  • Tax rate on income over $20,000: 25%
  • Calculate income tax on income over $20,000
  • Calculate total income tax
  • Calculate income after paying tax
Situation three – regressive tax

Regressive tax calculation: Jack

  • Income: $30,000
  • Tax rate on the first $20,000 of income: 15%
  • Calculate the tax on the first $20,000 of income
  • Tax rate on income over $20,000: 5%
  • Calculate income tax on income over $20,000
  • Calculate total income tax
  • Calculate income after paying tax

Regressive tax calculation: Emily

  • Income: $60,000
  • Tax rate on the first $20,000 of income: 15%
  • Calculate the tax on the first $20,000 of income
  • Tax rate on income over $20,000: 5%
  • Calculate income tax on income over $20,000
  • Calculate total income tax
  • Calculate income after paying tax
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