7.3 Computing Sales and Property Taxes

Notes

Tax amount = price (or value) $\times$ tax rate as a decimal.

• Total with sales tax $=$ price $+$ tax, or price $\times (1 + \text{rate})$.
• Example: $80 item, 7% tax: $80 \times 0.07 = 5.60$. Total $85.60.
• Property tax = assessed value $\times$ rate. Example: $150,000 at 2% is $3,000 per year, or $250 per month.
• Sales tax is a regressive burden for low earners because it takes a larger share of a small income, even though everyone pays the same rate.