In$-$Class Problems for Class $1$

Problem $1$: Identify the amount due for the following scenarios. In each case you will need to

identify who owes the tax, the tax base, and the applicable rate.

$1)$ California imposes a tax on income at the following rates:

Income Rate

$0-100,0008\%$

$>100,00010\%$

John earns $$300,000$ from his job during the year.

$2)$ Jo lives in Menlo county and makes the following expenditures: i$)$ Television for $$800,$

ii$)$ Subscription to a cloud computing center for $$100,$ and iii$)$ Groceries for $$150.$ The

county imposes a sales tax on all physical goods of $5\%,$ and $2\%$ on all food items.

Problem $2$ Discuss the probable justification for each of the following aspects of the tax law.

Specifically indicate whether Economic, Equity, Political, or Social considerations were the

motivating factor. Note: A tax credit is a direct reduction to your tax payment and a deduction is

a direct reduction to your tax base.

a$.$ A tax credit is allowed for amounts spent to furnish care for minor children while the parent

works.

b$.$ Deductions for interest on home mortgage and property taxes on a personal residence.

c$.$ Fines and penalties are not deductible.