Consider Two People, Sandy Smith, Who Earns $25,000, and Gary

Consider two people, Sandy Smith, who earns $25,000, and Gary Carver, who earns $50,000. If the government has decided to tax everyone's first $25,000 at 20 percent and everyone's second $25,000 at 40 percent, then Gary pays:

A) $10,000 in taxes and Sandy pays $5,000 in taxes.
B) $10,000 in taxes and Sandy pays $10,000 in taxes.
C) $15,000 in taxes and Sandy pays $5,000 in taxes.
D) $15,000 in taxes and Sandy pays $10,000 in taxes.
E) $17,000 in taxes and Sandy pays $5,000 in taxes.

Correct Answer:

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