Calculate marginal tax rates using R

Question

I\'m writing a function to calculate tax owed given a level of income according to Australia\'s marginal tax rates.

I\'ve written a simple version of the function that r

Answer 1

I slightly changed your brackets and rates parameters. You can solve this problem using a while loop.

income_tax <- function(income,
    brackets = c(18200,37001,80000,180000),
    rates = c(.19,.325,.37,.45))
{
  nbrackets <- length(brackets)  
  if(income<=brackets[1]) 
    return(0)

  i <- 2
  cumtax <- 0
  while(i <= nbrackets) {
    if(income > brackets[i-1] && income < brackets[i]) 
      return(cumtax + rates[i-1]*(income-brackets[i-1]))
    else 
      cumtax <- cumtax + rates[i-1]*(brackets[i]-brackets[i-1])
      i <- i + 1
  }
  # income > brackets[nbrackets]
  cumtax + rates[nbrackets] * (income - brackets[nbrackets]) 
}

incomes <- seq(0,200000,25000)
round(sapply(incomes,income_tax),0)
# [1]     0  1292  7797 15922 24947 34197 43447 52697 63547