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5. Number Crunching > Apply a Progressive Tax

Apply a Progressive Tax

A progressive tax varies with the amount earned. For example, you might pay 10 percent on the first $10,000 you earn but 15 percent on any earnings over $10,000.

Suppose that the tax bands (the tax rates for a given income level) are as shown in Table 5-21.

Table 5-21. The taxBand table
Tax band low boundaryTax band high boundaryPercentage
010,0000%
10,00030,00010%
30,000-15%

Consider the tax payers shown in Table 5-22.

Table 5-22. The earnings table
NameEarnings
Corbett5,000
Barker10,100
Cleese30,100

Corbett earns $5,000 and pays nothing; his earnings lie in the zero rated band.

Barker earns $10,100. He should pay 10 percent of the $100 that he earned over the $10,000 limit. His bill will be $10.


  

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