Calculate the tax burdens associated with each tax below as directed. Show your calculations for each question. 1. RedBall Productions is a new company based in Orem, Utah, where the state corporate income tax consists of a flat tax rate of 5 percent. RedBall Production's taxable income in 2005 was $500,000. Determine their corporate taxes by calculating 5 percent of RedBall’s taxable income (multiply by 0.05). What amount of state income tax did RedBall Productions owe? 2. The assessed value of Patty's residential property was $200,000 in 2004. In 2006, the assessed value increased to $225,000. The property tax rate in both years was 1.2 percent. Patty earned $60,000 each year. a) Determine Patty’s property taxes for 2004 by calculating 1.2 percent of $200,000 (multiply by 0.012), and then determine her taxes for 2006 by calculating 1.2 percent of $225,000. Subtract the 2004 tax figure from the 2006 amount. How much more did Patty have to pay for her property tax in 2006 than in 2004? b) You can calculate the percentage of Patty’s income that she paid in property taxes with simple math. For instance, in 2004, Patty paid $2,400 in property taxes. Divide that number by her income, $60,000, and you get 0.04, or 4 percent. What percentage of her income did Patty pay in property taxes in 2006? 3. David lives in Manhattan, where the combined state/local sales tax is 8.375 percent. David just purchased a digital camera that was priced at $800. Determine the sales tax he paid by calculating 8.375 percent of $800 (multiply by 0.08375). How much sales tax did he pay? 4. Cecelia is an avid art collector who owns many original works of art. Recently, she decided to sell an oil painting by Norman Rockwell. The buyer paid $500,000 for the painting. Since Cecelia had paid just $350,000 for the painting, she made a profit, or capital gain, on the sale. Determine Cecelia’s capital gain by subtracting $350,000 from $500,000. If the capital gain tax is 15 percent, you would calculate the tax bill by multiplying her capital gain by 0.15. How much tax did Cecelia owe? 5. Mallory's total income last year was $24,000, but she could deduct $12,000 for various reasons. Her taxable income equals the amount left over after deductions. If she had to pay 15 percent of her taxable income in federal income tax, which you can calculate by multiplying her taxable income by 0.15, what was her total tax payment? 6. Kristin lives in Alaska. Ben lives in Rhode Island. They each drive a car with a 12-gallon fuel tank. When Kristin fills her empty gas tank in Alaska, she has to pay a federal gasoline tax of $.18 (or 18 cents) per gallon, plus a state gas tax of 8 cents ($.08) per gallon. Her taxes paid for a gallon of gas equal 26 cents. When Ben fills his empty gas tank in Rhode Island, he has to pay the same federal gas tax of 18 cents per gallon, plus a state gas tax of $.30 per gallon, for a total of 48 cents in tax for a gallon of gas. a) Calculate the taxes each pays for a full tank, 12 gallons of gas, and then subtract the smaller figure from the larger. How much more tax does Ben pay for 12 gallons of gas than Kristin? b) If Ben earns $50,000 per year, and uses 550 gallons of gas driving to and from work, what percentage of his income does he pay in gas taxes? First, multiply the total number of gallons he uses by the taxes he pays for each gallon (0.48), and then divide that number by his yearly income. c) You can calculate the percentage of a purchase that goes to taxes by dividing the tax amount by the total sale price. If Kristin buys gas at $3.69 per gallon, which includes all taxes, what percentage of the price is the state tax? What percentage is the federal tax?