From the statement of the problem, we know that:
1) Mr Job income is $3,690,000.
2) He is entitled to 2/9 of this amount free of tax and a further tax-free allowance of $770,000. So, only:
X = (1 - 2/9) * $3,690,000 - $770,000 = $2,870,000.00 - $770,000 = $2,100,000.
from his salary will pay taxes.
3) He pays 10 cents in the dollar on the first $600,000. So he pays:
T1 = 0.1 * $600,000 = $60,000
for the first $600,000.
After this, the money left to deduct taxes is:
X1 = X - $600,000 = $2,100,000 - $600,000 = $1,500,000.
4) He pays 40 cents in the dollar on the next $450,000. So he pays:
T2 = 0.4 * $450,000 = $180,000
for the next $450,000.
After this, the money left to deduct taxes is:
X2 = X1 - $450,000 = $1,500,000 - $450,000 = $1,050,000.
5) He pays 60 cents in the dollar on the next $450,000. So he pays:
T3 = 0.6 * $450,000 = $270,000
for the next $450,000.
After this, the remaning balance is:
X3 = X2 - $450,000 = $1,050,000 - $450,000 = $600,000.
6) He pays 70 cents in the dollar on the remaining balance. The remaining balance is X3 = $600,000.
So he pays:
T4 = 0.7 * $600,000 = $420,000
for the reamaining balance.
The total income tax is the sum of each of the partial taxes:
T = T1 + T2 + T3 + T4 = $60,000 + $180,000 + $270,000 + $420,000 = $930,000.
Answer
The total income tax that Mr Job pays is $930,000.
