Suppose that the flat tax is 20 percent. A worker who earns $1000 before taxes and puts all of the income net of taxes into a bond that earns 10 percent per annum will pay an additional ________ in taxes from interest income next year.
A. $80
B. $8
C. $800
D. $880
Answer:B
Suppose that the flat tax is 20 percent. A worker who earns $1000 before taxes and puts all of the income net of taxes into a bond that earns 10 percent per annum will pay an additional ________ in taxes from interest income next year.
A. $80 B. $8 C. $800 D. $880