Question

suppose that algeria has a workforce of 9,416,534, each of whom earns an average annual salary of (equivalent us dollars) $6,844. if the algerian government wishes to raise $9 billion in tax revenue, approximately where should it set the income tax rate?
a. 9%
b. 14%
c. 18%
d. 26%
please select the best answer from the choices provided
○ a
○ b
○ c
○ d

Explanation:

Step1: Calculate total income of workforce

Total workforce = 9,416,534, average salary = $6,844.
Total income = \( 9,416,534 \times 6,844 \)
First, approximate: \( 9.416534 \times 10^6 \times 6.844 \approx 9.416534 \times 6.844 \times 10^6 \)
\( 9.416534 \times 6.844 \approx 9 \times 6.844 + 0.416534 \times 6.844 \approx 61.596 + 2.85 \approx 64.446 \)
So total income ≈ \( 64.446 \times 10^6 \times 10^3 = 64.446 \times 10^9 = 64.446 \) billion dollars (since \( 10^6 \times 10^3 = 10^9 \), billion).

Step2: Calculate tax rate

Desired tax revenue = $9 billion.
Tax rate \( r = \frac{\text{Tax Revenue}}{\text{Total Income}} \times 100\% = \frac{9}{64.446} \times 100\% \approx 13.96\% \approx 14\% \).

Answer:

b. 14%