suppose that algeria has a workforce of 9,416,534, each of whom earns an average annual salary of…

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?\na. 9%\nb. 14%\nc. 18%\nd. 26%

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?\na. 9%\nb. 14%\nc. 18%\nd. 26%

Answer

Explanation:

Step1: Calculate total pre - tax income

The total pre - tax income of the workforce is the product of the number of workers and the average salary. Let $n = 9416534$ be the number of workers and $s=6844$ be the average salary. Then the total pre - tax income $T=n\times s$. $T = 9416534\times6844$ $T=9416534\times(6000 + 800+40 + 4)$ $T=9416534\times6000+9416534\times800+9416534\times40+9416534\times4$ $T = 56499204000+7533227200+376661360+37666136$ $T=64446718696\approx6444.67$ million dollars $\approx6.445$ billion dollars.

Step2: Calculate the tax rate

Let $r$ be the tax rate. We know that the tax revenue $R = T\times r$. We want $R = 9$ billion dollars. So $r=\frac{R}{T}$. $r=\frac{9000000000}{64446718696}\approx0.14$ or $14%$.

Answer:

B. 14%