to the nearest integer.) More info Corporate Tax Rate Schedule Taxable income brackets Base tax $o to 50,000 to 75,000 to $50,000 75,000 7. 100,000 13, 100,000 to 335,000 10,000,000 22, 113, 335,000 to 10,000,000 to 15,000,000 3,400, 15.000.000 to 18.333 333 5.150
to the nearest integer.) More info Corporate Tax Rate Schedule Taxable income brackets Base tax $o to 50,000 to 75,000 to $50,000 75,000 7. 100,000 13, 100,000 to 335,000 10,000,000 22, 113, 335,000 to 10,000,000 to 15,000,000 3,400, 15.000.000 to 18.333 333 5.150
Chapter3: Organizing And Financing A New Venture
Section: Chapter Questions
Problem 7EP
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Question
Transcribed Image Text:Question 16, P1-8 (book/static)
Part 1 of 18
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Marginal corporate tax rates Using the corporate tax rate schedule given here i, perform the following:
a. Find the marginal tax rate for the following levels of corporate earnings before taxes: $12,000; $40,000; $70,000; $90,000; $300,000; $550,000; $1.3 million; and $22 million.
b. Plot the marginal tax rate (measured on the y-axis) against the pretax income levels (measured on the x-axis). Explain the relationship between the marginal tax rate and pretax income levels.
a. The marginal tax rate for corporate earnings before taxes of $12,000 is
%. (Round to the nearest integer.)
More info
Corporate Tax Rate Schedule
Tax calculation
Taxable income brackets
Base tax
(Marginal rate x amount over bracket lower limit)
$0)
50,000)
75,000)
100,000)
335,000)
10,000,000)
15,000,000)
18,333,333)
$0 to
$50,000
$0
x amount over
(15%
(25%
(34%
+
50,000 to
75,000
7,500
x amount over
+
75,000 to
100,000
13,750
x amount over
(39%
(34%
(35%
(38%
(35%
100,000 to
335,000
22,250
x amount over
335,000 to
10,000,000
113,900
x amount over
10,000,000 to
15,000,000
3,400,000
x amount over
+
15,000,000 to
18,333,333
5,150,000
x amount over
Over 18,333,333
6,416,667
x amount over
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