Carol's taxable income is $89,786. What is her total income tax owed according to the graduated tax schedule?

• A. $16,250
• B. $19,636
• C. $22,750
• D. $25,000

Answer: (B)

To determine Carol's total income tax owed based on a graduated tax schedule, it is important to understand how this system works. The graduated tax system applies different tax rates to different portions of income rather than taxing the entire income at a single rate.

For example, under a general graduated tax structure, the first segment of income up to a certain threshold may be taxed at a lower rate. The next segment, up to a higher threshold, is taxed at a slightly higher rate, and this continues to progress with additional income brackets. By calculating the tax owed in each segment and summing these amounts, you arrive at the total tax liability.

In this case, if Carol has a taxable income of $89,786 and the corresponding calculations according to the graduated tax schedule yield her total tax liability of $19,636, this correctly reflects her tax obligation based on the income ranges and rates defined in that schedule. This chosen figure takes into account the specific tax brackets applicable to her income, allowing for savings in lower brackets while incrementally increasing the tax burden on the higher portions of her income.

This comprehensive approach aligns with the principles of a graduated tax system, demonstrating how each income level is taxed progressively. Therefore, the calculated total of $19,