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[See Steps] Although the income tax system is structured so that people with higher incomes should pay a higher percentage of their incomes in taxes, there

Question: Although the income tax system is structured so that people with higher incomes should pay a higher percentage of their incomes in taxes, there are many loopholes and tax shelters available for individuals with higher incomes. A sample of individual 2009 tax returns gave the data listed in the table.

Gross Income, X Taxes Paid, Y
38.7 16
80.5 20.1
14.8 11.1
47.3 24.3
9.1 10.2
150.7 30.4
55.9 27.3
110.2 27.9
73.2 16.2
146.8 29.8
100.4 23.4
  1. Compute r and interpret results Follow format on corr—reg sheet for parts a) — e)
  2. Compute r—squared and interpret results
  3. is r significant at the alpha=0.05 (State t—value and reasoning-Use 6—step format)
  4. Compute the line of regression.
  5. Compute the see, and interpret its results relevant to problem
  6. Predict the mean percentage of income paid in taxes by individuals with gross income of $80,000.

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