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5.2 Graduated Income Tax

5.2 Graduated Income Tax
  • Math Help

    When dividing large numbers with one or more "trailing zeros" (the zeros after the last nonzero digit), you can simplify the division by "removing" the same number of trailing zeros from the numerator and denominator. For instance, to perform the division in Example 5(a), note that you can rewrite


    Next, divide out the common factor 1,000,000,000,000 from both the numerator and the denominator of the fraction.

    This fraction is easier to enter into a calculator (or to use in long division) than the original fraction. After dividing

    you obtain the same answer shown in Example 5(a). For Example 5(b), you can write

  • Consumer Suggestion

    Did you know that the first personal income tax on the American people came about during the Civil War as a way to fund the war? To learn more about the Civil War, visit or check your local listings for the History Channel, which frequently airs specials about the American Civil War.

  • Checkpoint Solution

    Sample answer:

    Use a graduated tax on taxable income using the following table.

    Eliminate loopholes by removing all deductions except for the standard deduction, personal exemptions, child care, health and education costs, and retirement. The alternative minimum tax would be abolished because there would no longer be loopholes. Capital gains would be taxed as ordinary income, except up to $250,000 in profit on the sale of your primary residence. There would be little or no changing of the tax laws from year to year, other than rate and threshold adjustments due to inflation.

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