Answer:
Step-by-step explanation:
From the given question:
a) The piecewise function for the Social Security tax s(x) is expressed as:
s(x) = x * 6.05% when x < $17,700
The 6.05% of the given amount is:
= (6.05/100) * 17700
= 1070.85
s(x) = 1070.85 when x ≥ $17,700
b) Ten years later, i.e. 1988; the percentage had increased to 7.51% & maximum taxable income also increased to $45000
The piecewise function for the Social Security tax s(x) is expressed as:
s(x) = x * 7.51% when x < $45,000
The 7.51% of the given amount is:
= (7.51/100) * 45000
= 3379.5
s(x) = 3379.5 when x ≥ $45,500
c) The difference in the Social Security and Medicare taxes paid is as follows:
In 1978, s(x) = 1070.85 when x ≥ $17,700
In 1988, s(x) = 3379.5 when x ≥ $45,500
The difference in the Social Security and Medicare taxes paid = $3379.5 - $1070.85
The difference in the Social Security and Medicare taxes paid = $2308.65
In 1988 $ 1,578.65 less was paid than in 1978.
Given that in 1978, the Social Security and Medicare rate combined was 6.05%, up to $ 17,700 earned, while ten years later, the percent had increased to 7.51% and the maximum taxable income had increased to $ 45,000, to determine, if a person earned $ 50,000 in 1978, and $ 50,000 in 1988, what was the difference in the Social Security and Medicare taxes paid, the following calculations must be performed:
Therefore, in 1988 $ 1,578.65 less was paid than in 1978.
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