Mr. johnson earns $100,000 per year. each year he spends $70,000 and saves $30,000. he pays a 5 percent sales tax on all of his spending. assuming this is the only tax he pays, his average tax rate out of his income is
Accepted Solution
A:
$3500 Take 70000, and only 70000 because this is the only thing being taxed. Multiply it by 5% or 0.05 and you will recieve, or in this case, be taken away, $3500.