Part A: Suppose Alice lives in a state with a variable state income tax rate. The state income tax rate is 1% on income up to $20,000 and 1.8% on income over $20,000. If Alice earns $30,050, what would her state income tax be?
Part B: Suppose Alice moves to a state with a flat state income tax rate. The state income tax rate is 1.2%. If Alice earns $30,050, what would her state income tax be?
Part C: What is the difference between variable state income tax rates and flat state income tax rates?