Problem $02-06($Algo$)$ LO $2-2]$

Mr$.$ and Mrs$.$ Jerald own a dry cleaning business that generates $$183,750$ taxable income each year. For the past few years, the

couple's federal tax rate on this income has been $32$ percent. Congress recently increased the tax rate for next year to $40$ percent.

Required:

a$.$ Based on a static forecast, how much additional revenue will the federal government collect from Mr$.$ and Mrs$.$ Jerald next year?

b$.$ How much additional revenue will the government collect if Mr$.$ and Mrs$.$ Jerald respond to the rate increase by working harder and

earning $$198,750$ next year?

c$.$ How much additional revenue will the government collect if Mr$.$ and Mrs$.$ Jerald respond to the rate increase by working less and

earning only $$168,750$ next year?

Answer is complete but not entirely correct.

Complete this question by entering your answers in the tabs below.

Required A

How much additional revenue will the government collect if Mr$.$ and Mrs$.$ Jerald respond to the rate increase by working harder

and earning $$198,750$ next year?

$$,13,500$