Ask Question
21 June, 02:22

Suppose the government imposes a tax of 10 percent on the first $40,000 of income and 20 percent on all income above $40,000. What are the tax liability and the marginal tax rate for a person whose income is $50,000? a. 12 percent and 20 percent, respectivelyb. 12 percent and $50,000, respectivelyc.$6,000 and 12 percent, respectivelyd.$6,000 and 20 percent, respectively

+1
Answers (1)
  1. 21 June, 05:52
    0
    total tax liability = $6,000

    marginal tax rate = 20%

    Explanation:

    total tax liability = ($4,000 x 10%) + [ ($50,000 - $40,000) x 20%] = $4,000 + $2,000 = $6,000

    The marginal tax rate is the tax rate applicable to an additional dollar of income. Since the $50,000 income falls into the second bracket, the marginal tax rate is 20%.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “Suppose the government imposes a tax of 10 percent on the first $40,000 of income and 20 percent on all income above $40,000. What are the ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers