Question by whiteninjarocks: How do you calculate the after-tax income?
This is for an economics assignment. The tax that is given is levied at a rate of 1% of the market value of real estate owned. Landlords pass this tax onto their tenants in the form of higher rents. This additional amount is $ 2,000 per year and should be considered to be a tax paid by renters. I know the household income, income shared, household wealth, and wealth shared.
Answer by CHARLES R
Part of the question seems to be missing
Assuming the $ 2,000 per year is the full real estate tax then the property is worth $ 200,000
For the renters after tax income is going to be
Income – ( Real Estate Tax + All other taxes.)
Household wealth should have no bearing unless you have a start and end of year value, then you’d have to include the delta in income.
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