### 5.1 Flat Tax & Political Philosophy

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• 1. Indiana Income Tax

Determine how much state income tax the person owes. (See Example 1.)

A person who lives in Indiana has a taxable income of \$49,000.

• Worked-Out Solution

Line 7 on the state income tax form is \$49,000.

The state income tax is 3.4% of Line 7.

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```  ____     _    _              _    _      _____
|  _ \\  | || | ||   ____    | || | ||   / ___//
| |_| || | || | ||  |    \\  | || | ||   \___ \\
| .  //  | \\_/ ||  | [] ||  | \\_/ ||   /    //
|_|\_\\   \____//   |  __//   \____//   /____//
`-` --`    `---`    |_|`-`     `---`   `-----`
`-`
```
• 2. Indiana Income Tax

Determine how much state income tax the person owes. (See Example 1.)

A person who lives in Indiana has a taxable income of \$2,500,000.

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``` _    _     ______    ______     ___    __    __
| |  | ||  /_   _//  /_   _//   / _ \\  \ \\ / //
| |/\| ||   -| ||-     | ||    / //\ \\  \ \/ //
|  /\  ||   _| ||_    _| ||   |  ___  ||  \  //
|_// \_||  /_____//  /__//    |_||  |_||   \//
`-`   `-`  `-----`   `--`     `-`   `-`     `

```
• 3. Michigan Income Tax

Determine how much state income tax the person owes. (See Example 1.)

A person who lives in Michigan has a taxable income of \$25,000.

• Worked-Out Solution

Line 16 on the state income tax form is \$25,000.

The state income tax is 4.35% of Line 16.

These comments are not screened before publication. Constructive debate about the information on this page is welcome, but personal attacks are not. Please do not post comments that are commercial in nature or that violate copyright. Comments that we regard as obscene, defamatory, or intended to incite violence will be removed. If you find a comment offensive, you may flag it.

```  ______     ___     __   _    _    _    _    _
/_   _//   / _ \\  | || | || | || | || | \  / ||
`-| |,-   | / \ || | '--' || | || | || |  \/  ||
| ||    | \_/ || | .--. || | \\_/ || | .  . ||
|_||     \___//  |_|| |_||  \____//  |_|\/|_||
`-`'     `---`   `-`  `-`    `---`   `-`  `-`

```
• 4. Michigan Income Tax

Determine how much state income tax the person owes. (See Example 1.)

A person who lives in Michigan has a taxable income of \$60,000.

These comments are not screened before publication. Constructive debate about the information on this page is welcome, but personal attacks are not. Please do not post comments that are commercial in nature or that violate copyright. Comments that we regard as obscene, defamatory, or intended to incite violence will be removed. If you find a comment offensive, you may flag it.

```  _____     ______   ______      ___      ____
/  ___||  /_   _// |      \\   / _ \\   |  _ \\
| // __     -| ||-  |  --  //  | / \ ||  | |_| ||
| \\_\ ||   _| ||_  |  --  \\  | \_/ ||  | .  //
\____//   /_____// |______//   \___//   |_|\_\\
`---`    `-----`  `------`    `---`    `-` --`

```
• 5. Taxable Income

Use the Internet to determine whether the income is taxable by the federal government. (See Example 2.)

• Worked-Out Solution

According to current IRS tax regulations, taxpayers are allowed to give and receive small amounts without paying tax. Therefore, the \$100 is not taxable.

These comments are not screened before publication. Constructive debate about the information on this page is welcome, but personal attacks are not. Please do not post comments that are commercial in nature or that violate copyright. Comments that we regard as obscene, defamatory, or intended to incite violence will be removed. If you find a comment offensive, you may flag it.

```  _  __   __   __    _  _      ___     _    _
| |/ //  \ \\/ //  | \| ||   / _ \\  | \  / ||
| ' //    \ ` //   |  ' ||  / //\ \\ |  \/  ||
| . \\     | ||    | .  || |  ___  ||| .  . ||
|_|\_\\    |_||    |_|\_|| |_||  |_|||_|\/|_||
`-` --`    `-`'    `-` -`  `-`   `-` `-`  `-`

```
• 6. Taxable Income

Use the Internet to determine whether the income is taxable by the federal government. (See Example 2.)

\$2000 per year scholarship you receive for college tuition

These comments are not screened before publication. Constructive debate about the information on this page is welcome, but personal attacks are not. Please do not post comments that are commercial in nature or that violate copyright. Comments that we regard as obscene, defamatory, or intended to incite violence will be removed. If you find a comment offensive, you may flag it.

``` ______    _    _    __   _    _    _
|      \\ | || | || | || | || | || | ||   ____
|  --  // | || | || | '--' || | || | ||  |    \\
|  --  \\ | \\_/ || | .--. || | \\_/ ||  | [] ||
|______//  \____//  |_|| |_||  \____//   |  __//
`------`    `---`   `-`  `-`    `---`    |_|`-`
`-`
```
• 7. Taxable Income

Use the Internet to determine whether the income is taxable by the federal government. (See Example 2.)

• Worked-Out Solution

Any bonuses or awards received by an employer are taxable. This also applies to noncash prizes such as vacations or other goods and services.

These comments are not screened before publication. Constructive debate about the information on this page is welcome, but personal attacks are not. Please do not post comments that are commercial in nature or that violate copyright. Comments that we regard as obscene, defamatory, or intended to incite violence will be removed. If you find a comment offensive, you may flag it.

```  _  __     ___               _    _     _____
| |/ //   / _ \\      ___   | || | ||  / ____||
| ' //   | / \ ||    /   || | || | || / //---`'
| . \\   | \_/ ||   | [] || | \\_/ || \ \\___
|_|\_\\   \___//     \__ ||  \____//   \_____||
`-` --`   `---`       -|_||   `---`     `----`
`-`
```
• 8. Taxable Income

Use the Internet to determine whether the income is taxable by the federal government. (See Example 2.)

\$5000 prize you receive from a game show

These comments are not screened before publication. Constructive debate about the information on this page is welcome, but personal attacks are not. Please do not post comments that are commercial in nature or that violate copyright. Comments that we regard as obscene, defamatory, or intended to incite violence will be removed. If you find a comment offensive, you may flag it.
``` _    _    __   __     _____    _____     _____