Average tax rate and marginal tax rate of a single tax payer.

Question

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Answer 1

Question

Chapter 3, Problem 26QP

a)

Summary Introduction

To determine: Average tax rate and marginal tax rate of a single tax payer.

a)

Expert Solution

Explanation of Solution

Given information:

The income of the single tax payer is $20,000.

The slab rates of single tax payers are as follows, they are

FUND OF CORPORATE FINANCE LL W/ CONNECT, Chapter 3, Problem 26QP

If the taxable income is $20,000 then up to $9,275 the tax rate is 10% and after that remaining balance is charged under 15% tax rate.

Calculation of taxes:

Taxes=($9,275×0.10)+(($20,000−$9,275)×0.15)=$2,535.95

Hence, taxes are $2,535.95.

Calculation of Average tax rate:

Average tax rate=$2,535.95$20,000=0.127=12.70%

Hence, average tax rate is 12.70%.

The marginal rate of tax is the tax rate that a person is incurred on his income of each additional dollar. Here the marginal rate is 15% incurred on each additional dollar of his income.

b)

Summary Introduction

To determine: Average tax rate and marginal tax rate of a single tax payer.

b)

Expert Solution

Explanation of Solution

Given information:

The income of the single tax payer is $50,000.

If the taxable income is $50,000 then up to $9,275 the tax rate is 10%, after that tax rate is 15% up to $37,650 then, after remaining balance is charged under 25% tax rate.

Calculation of taxes:

Taxes=($9,275×0.10)+(($37,650−$9,275)×0.15)+(($50,000−$37,650)×0.25)=$8,270.75

Hence, taxes are $8,270.75.

Calculation of Average tax rate:

Average tax rate=$8,270.75$50,000=0.165=16.5%

Hence, average tax rate is 16.50%

The marginal rate of tax is the tax rate that a person is incurred on his income of each additional dollar. Here the marginal rate is 25% incurred on each additional dollar of his income.

c)

Summary Introduction

To determine: Average tax rate and marginal tax rate of a single tax payer.

c)

Expert Solution

Explanation of Solution

Given information:

The income of the single tax payer is $300,000.

If the taxable income is $300,000 then up to $9,275 the tax rate is 10%, after that tax rate is 15% up to $37,650, up to $91,150 the tax rate is 25% and up to $190,150 the tax rate is 28% and up to $413,350 the tax rate is 33%, then the remaining balance is charged under 35% tax rate.

Calculation of taxes:

Taxes=($9,275×0.10)+(($37,650−$9,275)×0.15)+(($91,150−$37,650)×0.25)+(($190,150−$91,150)×0.28)+(($300,000−$190,150)×0.33)=$82,528.59

Hence, taxes are $82,528.59.

Calculation of Average tax rate:

Average tax rate=$82,528.59$300,000=0.275=27.50%

Hence, average tax rate is 27.50%.

The marginal rate of tax is the tax rate that a person is incurred on his income of each additional dollar. Here the marginal rate is 33% incurred on each additional dollar of his income.

d)

Summary Introduction

To determine: Average tax rate and marginal tax rate of a single tax payer.

d)

Expert Solution

Explanation of Solution

Given information:

The income of the single tax payer is $3,000,000.

Calculation of taxes:

Taxes=($9,275×0.10)+(($37,650−$9,275)×0.15)+(($91,150−$37,650)×0.25)+(($190,150−$91,150)×0.28)+(($413,350−$190,150)×0.33)+(($415,050−$413,350)×0.35)+(($3,000,000−$415,050)×0.396)=$1,144,170

Hence, taxes are $1,144,170.

Calculation of Average tax rate:

Average tax rate=$1,144,170$3,000,000=0.381=38.1%

Hence, average tax rate is 38.1%

The marginal rate of tax is the tax rate that a person is incurred on his income of each additional dollar. Here the marginal rate is 39.6% incurred on each additional dollar of his income.

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Students have asked these similar questions

If the tax rates are 15% on the first $50,000 of taxable income, and 20% on the next $25,000, and 25% on the next $25,000, what is the tax liability for an individual with $80,000 of taxable income, what is the marginal tax rate, and what is the average tax rate ? a. $10,250, 15%, and 20% b. $25,122, 22%, and 16% c. $11,345, 15%, and 34% d. $13,750, 25%, and 17.19%

4.An individual made $85,000 for the year. Using the tax given , answer the following questions: A.What is this person's marginal tax rate? B.How much tax does this person owe? C.What is the effective tax rate?

Suppose that the income tax in a certain nationis computed as a flat rate of 5 percent, but notax is levied above $50,000 in taxable income.Taxable income, in turn, is computed as theindividual's income minus $10,000; that is,everyone gets a $10,000 deduction. What arethe marginal and average tax rates for each ofthe following three workers? (Evaluate the mar-ginal tax rate at each person's current incomelevel.)a.A part-time worker with annual income of$9,000.b.A retail salesperson with annual income of$45,000.C.An advertising executive with annual incomeof $600,000.Is the tax progressive, proportional, or regres-sive with respect to income?

Answer 2

Question

Chapter 3, Problem 26QP

a)

Summary Introduction

To determine: Average tax rate and marginal tax rate of a single tax payer.

a)

Expert Solution

Explanation of Solution

Given information:

The income of the single tax payer is $20,000.

The slab rates of single tax payers are as follows, they are

FUND OF CORPORATE FINANCE LL W/ CONNECT, Chapter 3, Problem 26QP

If the taxable income is $20,000 then up to $9,275 the tax rate is 10% and after that remaining balance is charged under 15% tax rate.

Calculation of taxes:

Taxes=($9,275×0.10)+(($20,000−$9,275)×0.15)=$2,535.95

Hence, taxes are $2,535.95.

Calculation of Average tax rate:

Average tax rate=$2,535.95$20,000=0.127=12.70%

Hence, average tax rate is 12.70%.

The marginal rate of tax is the tax rate that a person is incurred on his income of each additional dollar. Here the marginal rate is 15% incurred on each additional dollar of his income.

b)

Summary Introduction

To determine: Average tax rate and marginal tax rate of a single tax payer.

b)

Expert Solution

Explanation of Solution

Given information:

The income of the single tax payer is $50,000.

If the taxable income is $50,000 then up to $9,275 the tax rate is 10%, after that tax rate is 15% up to $37,650 then, after remaining balance is charged under 25% tax rate.

Calculation of taxes:

Taxes=($9,275×0.10)+(($37,650−$9,275)×0.15)+(($50,000−$37,650)×0.25)=$8,270.75

Hence, taxes are $8,270.75.

Calculation of Average tax rate:

Average tax rate=$8,270.75$50,000=0.165=16.5%

Hence, average tax rate is 16.50%

The marginal rate of tax is the tax rate that a person is incurred on his income of each additional dollar. Here the marginal rate is 25% incurred on each additional dollar of his income.

c)

Summary Introduction

To determine: Average tax rate and marginal tax rate of a single tax payer.

c)

Expert Solution

Explanation of Solution

Given information:

The income of the single tax payer is $300,000.

If the taxable income is $300,000 then up to $9,275 the tax rate is 10%, after that tax rate is 15% up to $37,650, up to $91,150 the tax rate is 25% and up to $190,150 the tax rate is 28% and up to $413,350 the tax rate is 33%, then the remaining balance is charged under 35% tax rate.

Calculation of taxes:

Taxes=($9,275×0.10)+(($37,650−$9,275)×0.15)+(($91,150−$37,650)×0.25)+(($190,150−$91,150)×0.28)+(($300,000−$190,150)×0.33)=$82,528.59

Hence, taxes are $82,528.59.

Calculation of Average tax rate:

Average tax rate=$82,528.59$300,000=0.275=27.50%

Hence, average tax rate is 27.50%.

The marginal rate of tax is the tax rate that a person is incurred on his income of each additional dollar. Here the marginal rate is 33% incurred on each additional dollar of his income.

d)

Summary Introduction

To determine: Average tax rate and marginal tax rate of a single tax payer.

d)

Expert Solution

Explanation of Solution

Given information:

The income of the single tax payer is $3,000,000.

Calculation of taxes:

Taxes=($9,275×0.10)+(($37,650−$9,275)×0.15)+(($91,150−$37,650)×0.25)+(($190,150−$91,150)×0.28)+(($413,350−$190,150)×0.33)+(($415,050−$413,350)×0.35)+(($3,000,000−$415,050)×0.396)=$1,144,170

Hence, taxes are $1,144,170.

Calculation of Average tax rate:

Average tax rate=$1,144,170$3,000,000=0.381=38.1%

Hence, average tax rate is 38.1%

The marginal rate of tax is the tax rate that a person is incurred on his income of each additional dollar. Here the marginal rate is 39.6% incurred on each additional dollar of his income.

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Answer 3

Question

Chapter 3, Problem 26QP

a)

Summary Introduction

To determine: Average tax rate and marginal tax rate of a single tax payer.

a)

Expert Solution

Explanation of Solution

Given information:

The income of the single tax payer is $20,000.

The slab rates of single tax payers are as follows, they are

FUND OF CORPORATE FINANCE LL W/ CONNECT, Chapter 3, Problem 26QP

If the taxable income is $20,000 then up to $9,275 the tax rate is 10% and after that remaining balance is charged under 15% tax rate.

Calculation of taxes:

Taxes=($9,275×0.10)+(($20,000−$9,275)×0.15)=$2,535.95

Hence, taxes are $2,535.95.

Calculation of Average tax rate:

Average tax rate=$2,535.95$20,000=0.127=12.70%

Hence, average tax rate is 12.70%.

The marginal rate of tax is the tax rate that a person is incurred on his income of each additional dollar. Here the marginal rate is 15% incurred on each additional dollar of his income.

b)

Summary Introduction

To determine: Average tax rate and marginal tax rate of a single tax payer.

b)

Expert Solution

Explanation of Solution

Given information:

The income of the single tax payer is $50,000.

If the taxable income is $50,000 then up to $9,275 the tax rate is 10%, after that tax rate is 15% up to $37,650 then, after remaining balance is charged under 25% tax rate.

Calculation of taxes:

Taxes=($9,275×0.10)+(($37,650−$9,275)×0.15)+(($50,000−$37,650)×0.25)=$8,270.75

Hence, taxes are $8,270.75.

Calculation of Average tax rate:

Average tax rate=$8,270.75$50,000=0.165=16.5%

Hence, average tax rate is 16.50%

The marginal rate of tax is the tax rate that a person is incurred on his income of each additional dollar. Here the marginal rate is 25% incurred on each additional dollar of his income.

c)

Summary Introduction

To determine: Average tax rate and marginal tax rate of a single tax payer.

c)

Expert Solution

Explanation of Solution

Given information:

The income of the single tax payer is $300,000.

If the taxable income is $300,000 then up to $9,275 the tax rate is 10%, after that tax rate is 15% up to $37,650, up to $91,150 the tax rate is 25% and up to $190,150 the tax rate is 28% and up to $413,350 the tax rate is 33%, then the remaining balance is charged under 35% tax rate.

Calculation of taxes:

Taxes=($9,275×0.10)+(($37,650−$9,275)×0.15)+(($91,150−$37,650)×0.25)+(($190,150−$91,150)×0.28)+(($300,000−$190,150)×0.33)=$82,528.59

Hence, taxes are $82,528.59.

Calculation of Average tax rate:

Average tax rate=$82,528.59$300,000=0.275=27.50%

Hence, average tax rate is 27.50%.

The marginal rate of tax is the tax rate that a person is incurred on his income of each additional dollar. Here the marginal rate is 33% incurred on each additional dollar of his income.

d)

Summary Introduction

To determine: Average tax rate and marginal tax rate of a single tax payer.

d)

Expert Solution

Explanation of Solution

Given information:

The income of the single tax payer is $3,000,000.

Calculation of taxes:

Taxes=($9,275×0.10)+(($37,650−$9,275)×0.15)+(($91,150−$37,650)×0.25)+(($190,150−$91,150)×0.28)+(($413,350−$190,150)×0.33)+(($415,050−$413,350)×0.35)+(($3,000,000−$415,050)×0.396)=$1,144,170

Hence, taxes are $1,144,170.

Calculation of Average tax rate:

Average tax rate=$1,144,170$3,000,000=0.381=38.1%

Hence, average tax rate is 38.1%

The marginal rate of tax is the tax rate that a person is incurred on his income of each additional dollar. Here the marginal rate is 39.6% incurred on each additional dollar of his income.

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Answer 4

Question

Chapter 3, Problem 26QP

a)

Summary Introduction

To determine: Average tax rate and marginal tax rate of a single tax payer.

a)

Expert Solution

Explanation of Solution

Given information:

The income of the single tax payer is $20,000.

The slab rates of single tax payers are as follows, they are

FUND OF CORPORATE FINANCE LL W/ CONNECT, Chapter 3, Problem 26QP

If the taxable income is $20,000 then up to $9,275 the tax rate is 10% and after that remaining balance is charged under 15% tax rate.

Calculation of taxes:

Taxes=($9,275×0.10)+(($20,000−$9,275)×0.15)=$2,535.95

Hence, taxes are $2,535.95.

Calculation of Average tax rate:

Average tax rate=$2,535.95$20,000=0.127=12.70%

Hence, average tax rate is 12.70%.

The marginal rate of tax is the tax rate that a person is incurred on his income of each additional dollar. Here the marginal rate is 15% incurred on each additional dollar of his income.

b)

Summary Introduction

To determine: Average tax rate and marginal tax rate of a single tax payer.

b)

Expert Solution

Explanation of Solution

Given information:

The income of the single tax payer is $50,000.

If the taxable income is $50,000 then up to $9,275 the tax rate is 10%, after that tax rate is 15% up to $37,650 then, after remaining balance is charged under 25% tax rate.

Calculation of taxes:

Taxes=($9,275×0.10)+(($37,650−$9,275)×0.15)+(($50,000−$37,650)×0.25)=$8,270.75

Hence, taxes are $8,270.75.

Calculation of Average tax rate:

Average tax rate=$8,270.75$50,000=0.165=16.5%

Hence, average tax rate is 16.50%

The marginal rate of tax is the tax rate that a person is incurred on his income of each additional dollar. Here the marginal rate is 25% incurred on each additional dollar of his income.

c)

Summary Introduction

To determine: Average tax rate and marginal tax rate of a single tax payer.

c)

Expert Solution

Explanation of Solution

Given information:

The income of the single tax payer is $300,000.

If the taxable income is $300,000 then up to $9,275 the tax rate is 10%, after that tax rate is 15% up to $37,650, up to $91,150 the tax rate is 25% and up to $190,150 the tax rate is 28% and up to $413,350 the tax rate is 33%, then the remaining balance is charged under 35% tax rate.

Calculation of taxes:

Taxes=($9,275×0.10)+(($37,650−$9,275)×0.15)+(($91,150−$37,650)×0.25)+(($190,150−$91,150)×0.28)+(($300,000−$190,150)×0.33)=$82,528.59

Hence, taxes are $82,528.59.

Calculation of Average tax rate:

Average tax rate=$82,528.59$300,000=0.275=27.50%

Hence, average tax rate is 27.50%.

The marginal rate of tax is the tax rate that a person is incurred on his income of each additional dollar. Here the marginal rate is 33% incurred on each additional dollar of his income.

d)

Summary Introduction

To determine: Average tax rate and marginal tax rate of a single tax payer.

d)

Expert Solution

Explanation of Solution

Given information:

The income of the single tax payer is $3,000,000.

Calculation of taxes:

Taxes=($9,275×0.10)+(($37,650−$9,275)×0.15)+(($91,150−$37,650)×0.25)+(($190,150−$91,150)×0.28)+(($413,350−$190,150)×0.33)+(($415,050−$413,350)×0.35)+(($3,000,000−$415,050)×0.396)=$1,144,170

Hence, taxes are $1,144,170.

Calculation of Average tax rate:

Average tax rate=$1,144,170$3,000,000=0.381=38.1%

Hence, average tax rate is 38.1%

The marginal rate of tax is the tax rate that a person is incurred on his income of each additional dollar. Here the marginal rate is 39.6% incurred on each additional dollar of his income.

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Answer 5

Chapter 3, Problem 26QP

a)

Summary Introduction

To determine: Average tax rate and marginal tax rate of a single tax payer.

a)

Expert Solution

Explanation of Solution

Given information:

The income of the single tax payer is $20,000.

The slab rates of single tax payers are as follows, they are

FUND OF CORPORATE FINANCE LL W/ CONNECT, Chapter 3, Problem 26QP

If the taxable income is $20,000 then up to $9,275 the tax rate is 10% and after that remaining balance is charged under 15% tax rate.

Calculation of taxes:

Taxes=($9,275×0.10)+(($20,000−$9,275)×0.15)=$2,535.95

Hence, taxes are $2,535.95.

Calculation of Average tax rate:

Average tax rate=$2,535.95$20,000=0.127=12.70%

Hence, average tax rate is 12.70%.

The marginal rate of tax is the tax rate that a person is incurred on his income of each additional dollar. Here the marginal rate is 15% incurred on each additional dollar of his income.

b)

Summary Introduction

To determine: Average tax rate and marginal tax rate of a single tax payer.

b)

Expert Solution

Explanation of Solution

Given information:

The income of the single tax payer is $50,000.

If the taxable income is $50,000 then up to $9,275 the tax rate is 10%, after that tax rate is 15% up to $37,650 then, after remaining balance is charged under 25% tax rate.

Calculation of taxes:

Taxes=($9,275×0.10)+(($37,650−$9,275)×0.15)+(($50,000−$37,650)×0.25)=$8,270.75

Hence, taxes are $8,270.75.

Calculation of Average tax rate:

Average tax rate=$8,270.75$50,000=0.165=16.5%

Hence, average tax rate is 16.50%

The marginal rate of tax is the tax rate that a person is incurred on his income of each additional dollar. Here the marginal rate is 25% incurred on each additional dollar of his income.

c)

Summary Introduction

To determine: Average tax rate and marginal tax rate of a single tax payer.

c)

Expert Solution

Explanation of Solution

Given information:

The income of the single tax payer is $300,000.

If the taxable income is $300,000 then up to $9,275 the tax rate is 10%, after that tax rate is 15% up to $37,650, up to $91,150 the tax rate is 25% and up to $190,150 the tax rate is 28% and up to $413,350 the tax rate is 33%, then the remaining balance is charged under 35% tax rate.

Calculation of taxes:

Taxes=($9,275×0.10)+(($37,650−$9,275)×0.15)+(($91,150−$37,650)×0.25)+(($190,150−$91,150)×0.28)+(($300,000−$190,150)×0.33)=$82,528.59

Hence, taxes are $82,528.59.

Calculation of Average tax rate:

Average tax rate=$82,528.59$300,000=0.275=27.50%

Hence, average tax rate is 27.50%.

The marginal rate of tax is the tax rate that a person is incurred on his income of each additional dollar. Here the marginal rate is 33% incurred on each additional dollar of his income.

d)

Summary Introduction

To determine: Average tax rate and marginal tax rate of a single tax payer.

d)

Expert Solution

Explanation of Solution

Given information:

The income of the single tax payer is $3,000,000.

Calculation of taxes:

Taxes=($9,275×0.10)+(($37,650−$9,275)×0.15)+(($91,150−$37,650)×0.25)+(($190,150−$91,150)×0.28)+(($413,350−$190,150)×0.33)+(($415,050−$413,350)×0.35)+(($3,000,000−$415,050)×0.396)=$1,144,170

Hence, taxes are $1,144,170.

Calculation of Average tax rate:

Average tax rate=$1,144,170$3,000,000=0.381=38.1%

Hence, average tax rate is 38.1%

The marginal rate of tax is the tax rate that a person is incurred on his income of each additional dollar. Here the marginal rate is 39.6% incurred on each additional dollar of his income.

Answer 6

Chapter 3, Problem 26QP

a)

Summary Introduction

To determine: Average tax rate and marginal tax rate of a single tax payer.

a)

Expert Solution

Explanation of Solution

Given information:

The income of the single tax payer is $20,000.

The slab rates of single tax payers are as follows, they are

FUND OF CORPORATE FINANCE LL W/ CONNECT, Chapter 3, Problem 26QP

If the taxable income is $20,000 then up to $9,275 the tax rate is 10% and after that remaining balance is charged under 15% tax rate.

Calculation of taxes:

Taxes=($9,275×0.10)+(($20,000−$9,275)×0.15)=$2,535.95

Hence, taxes are $2,535.95.

Calculation of Average tax rate:

Average tax rate=$2,535.95$20,000=0.127=12.70%

Hence, average tax rate is 12.70%.

The marginal rate of tax is the tax rate that a person is incurred on his income of each additional dollar. Here the marginal rate is 15% incurred on each additional dollar of his income.

Answer 7

Chapter 3, Problem 26QP

a)

Summary Introduction

To determine: Average tax rate and marginal tax rate of a single tax payer.

Answer 8

a)

Expert Solution

Explanation of Solution

Given information:

The income of the single tax payer is $20,000.

The slab rates of single tax payers are as follows, they are

FUND OF CORPORATE FINANCE LL W/ CONNECT, Chapter 3, Problem 26QP

If the taxable income is $20,000 then up to $9,275 the tax rate is 10% and after that remaining balance is charged under 15% tax rate.

Calculation of taxes:

Taxes=($9,275×0.10)+(($20,000−$9,275)×0.15)=$2,535.95

Hence, taxes are $2,535.95.

Calculation of Average tax rate:

Average tax rate=$2,535.95$20,000=0.127=12.70%

Hence, average tax rate is 12.70%.

The marginal rate of tax is the tax rate that a person is incurred on his income of each additional dollar. Here the marginal rate is 15% incurred on each additional dollar of his income.

Answer 9

a)

Expert Solution

Answer 10

a)

Expert Solution

Answer 11

Expert Solution

Answer 12

b)

Summary Introduction

To determine: Average tax rate and marginal tax rate of a single tax payer.

b)

Expert Solution

Explanation of Solution

Given information:

The income of the single tax payer is $50,000.

If the taxable income is $50,000 then up to $9,275 the tax rate is 10%, after that tax rate is 15% up to $37,650 then, after remaining balance is charged under 25% tax rate.

Calculation of taxes:

Taxes=($9,275×0.10)+(($37,650−$9,275)×0.15)+(($50,000−$37,650)×0.25)=$8,270.75

Hence, taxes are $8,270.75.

Calculation of Average tax rate:

Average tax rate=$8,270.75$50,000=0.165=16.5%

Hence, average tax rate is 16.50%

The marginal rate of tax is the tax rate that a person is incurred on his income of each additional dollar. Here the marginal rate is 25% incurred on each additional dollar of his income.

Answer 13

b)

Summary Introduction

To determine: Average tax rate and marginal tax rate of a single tax payer.

Answer 14

b)

Expert Solution

Explanation of Solution

Given information:

The income of the single tax payer is $50,000.

If the taxable income is $50,000 then up to $9,275 the tax rate is 10%, after that tax rate is 15% up to $37,650 then, after remaining balance is charged under 25% tax rate.

Calculation of taxes:

Taxes=($9,275×0.10)+(($37,650−$9,275)×0.15)+(($50,000−$37,650)×0.25)=$8,270.75

Hence, taxes are $8,270.75.

Calculation of Average tax rate:

Average tax rate=$8,270.75$50,000=0.165=16.5%

Hence, average tax rate is 16.50%

The marginal rate of tax is the tax rate that a person is incurred on his income of each additional dollar. Here the marginal rate is 25% incurred on each additional dollar of his income.

Answer 15

b)

Expert Solution

Answer 16

b)

Expert Solution

Answer 17

Expert Solution

Answer 18

c)

Summary Introduction

To determine: Average tax rate and marginal tax rate of a single tax payer.

c)

Expert Solution

Explanation of Solution

Given information:

The income of the single tax payer is $300,000.

If the taxable income is $300,000 then up to $9,275 the tax rate is 10%, after that tax rate is 15% up to $37,650, up to $91,150 the tax rate is 25% and up to $190,150 the tax rate is 28% and up to $413,350 the tax rate is 33%, then the remaining balance is charged under 35% tax rate.

Calculation of taxes:

Taxes=($9,275×0.10)+(($37,650−$9,275)×0.15)+(($91,150−$37,650)×0.25)+(($190,150−$91,150)×0.28)+(($300,000−$190,150)×0.33)=$82,528.59

Hence, taxes are $82,528.59.

Calculation of Average tax rate:

Average tax rate=$82,528.59$300,000=0.275=27.50%

Hence, average tax rate is 27.50%.

The marginal rate of tax is the tax rate that a person is incurred on his income of each additional dollar. Here the marginal rate is 33% incurred on each additional dollar of his income.

Answer 19

c)

Summary Introduction

To determine: Average tax rate and marginal tax rate of a single tax payer.

Answer 20

c)

Expert Solution

Explanation of Solution

Given information:

The income of the single tax payer is $300,000.

If the taxable income is $300,000 then up to $9,275 the tax rate is 10%, after that tax rate is 15% up to $37,650, up to $91,150 the tax rate is 25% and up to $190,150 the tax rate is 28% and up to $413,350 the tax rate is 33%, then the remaining balance is charged under 35% tax rate.

Calculation of taxes:

Taxes=($9,275×0.10)+(($37,650−$9,275)×0.15)+(($91,150−$37,650)×0.25)+(($190,150−$91,150)×0.28)+(($300,000−$190,150)×0.33)=$82,528.59

Hence, taxes are $82,528.59.

Calculation of Average tax rate:

Average tax rate=$82,528.59$300,000=0.275=27.50%

Hence, average tax rate is 27.50%.

The marginal rate of tax is the tax rate that a person is incurred on his income of each additional dollar. Here the marginal rate is 33% incurred on each additional dollar of his income.

Answer 21

c)

Expert Solution

Answer 22

c)

Expert Solution

Answer 23

Expert Solution

Answer 24

d)

Summary Introduction

To determine: Average tax rate and marginal tax rate of a single tax payer.

d)

Expert Solution

Explanation of Solution

Given information:

The income of the single tax payer is $3,000,000.

Calculation of taxes:

Taxes=($9,275×0.10)+(($37,650−$9,275)×0.15)+(($91,150−$37,650)×0.25)+(($190,150−$91,150)×0.28)+(($413,350−$190,150)×0.33)+(($415,050−$413,350)×0.35)+(($3,000,000−$415,050)×0.396)=$1,144,170

Hence, taxes are $1,144,170.

Calculation of Average tax rate:

Average tax rate=$1,144,170$3,000,000=0.381=38.1%

Hence, average tax rate is 38.1%

The marginal rate of tax is the tax rate that a person is incurred on his income of each additional dollar. Here the marginal rate is 39.6% incurred on each additional dollar of his income.

Answer 25

d)

Summary Introduction

To determine: Average tax rate and marginal tax rate of a single tax payer.

Answer 26

d)

Expert Solution

Explanation of Solution

Given information:

The income of the single tax payer is $3,000,000.

Calculation of taxes:

Taxes=($9,275×0.10)+(($37,650−$9,275)×0.15)+(($91,150−$37,650)×0.25)+(($190,150−$91,150)×0.28)+(($413,350−$190,150)×0.33)+(($415,050−$413,350)×0.35)+(($3,000,000−$415,050)×0.396)=$1,144,170

Hence, taxes are $1,144,170.

Calculation of Average tax rate:

Average tax rate=$1,144,170$3,000,000=0.381=38.1%

Hence, average tax rate is 38.1%

The marginal rate of tax is the tax rate that a person is incurred on his income of each additional dollar. Here the marginal rate is 39.6% incurred on each additional dollar of his income.