Question

Use the image to answer the question.

Quadrant 1 of a coordinate plane shows the x axis labeled taxable income and the y axis labeled tax rate.
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The x-axis ranges from 0 to 200,000 in increments of 20,000. The y-axis ranges from 0 to 40 in increments of 10. Four line segments are plotted. The first line segment starts with a closed circle at left parenthesis 0 comma space 10 right parenthesis and ends with a closed circle at approximately left parenthesis 10,000 comma space 10 right parenthesis. The second line segment starts with an open circle at left parenthesis 10,000 comma space 15 right parenthesis and ends with a closed circle at left parenthesis 40,000 comma space 15 right parenthesis. The third line segment starts with an open circle at left parenthesis 40,000 comma space 25 right parenthesis and ends with a closed circle at left parenthesis 91,150 comma space 25 right parenthesis. The fourth line segment starts with an open circle at left parenthesis 91,151 comma space 28 right parenthesis and ends with a closed circle at left parenthesis 190,000 comma space 28 right parenthesis.

A tax preparer needs to explain tax rates to a client. Which of the following best interprets the piecewise linear function for a tax client who earns $65,000?

(1 point)

The client will be taxed at a rate of 25% since their taxable income is within the fourth step of the function.

The client will be taxed at a rate of 26% since their taxable income is within the third step of the function.

The client will be taxed at a rate of 10% for the first $9,275 of taxable income. They will be taxed at a rate of 15% for $28,375, which is the amount of taxable income within the second step. They will be taxed at a rate of 25% for the remaining $27,350, which is the amount of taxable income within the third step.

The client will be taxed at a rate of 10% for the first $9,275 of taxable income. They will be taxed at a rate of 15% for $37,650. They will be taxed at a rate of 25% for $91,150. They will be taxed at a rate of 28% for $118,000.

Answer 1

The third choice. It correctly explains the progressive (marginal) tax: 10% on the first $9,275, 15% on the next $28,375, and 25% on the remaining $27,350 (these amounts add to $65,000).