If the Murphy's have a gross annual household income is $85,420 then they would have to pay $8542 in taxes.
The Murphy's would have to pay 10 percent of their gross income as taxes.
To calculate their state tax, we would have to calculate 10 percent of $85,420
= 10% * $85,420
= $8542
These are compulsory payments in the form of revenues that the governments gets from the income of its citizens.
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