Marginal tax rate (% Taxable income $0-$5,000 $5,001-$15,000 $15,001-$30,000 $30

Question

Marginal tax rate (% Taxable income $0-$5,000 $5,001-$15,000 $15,001-$30,000 $30,001-$50,000 $50,001-$75,000 $75,001-$100,000 $100,001-$130,000 $130,001-$175,000 $175,001+ 7 13 15 20 21 Instructions: Round your answers to one decimal place a. Connor pays $ b. Connor's marginal tax rate is in income tax. 15 %. Connor's overall tax rate is c. Connor isn't crazy about his job and wants to move to a job in a related industry that pays $100,000. With his new job, Connor will have to pay $ in taxes. d. The income tax in Independence is progressive

Explanation / Answer

Compute the amount of tax with the given salary of $95,000 as:

Total tax = 5000*0.05 + 10000*0.07 + 15000*0.09 + 20000*0.11 + 25000*0.13 + (95000 - 75000)*0.15

= 250 + 700 + 1350 + 2200 + 3250 + 3000

= $10,750

Average or overall tax rate = Tax paid/ Total income = 10750/95000 = 11.31%

Related Questions

Navigate

• Browse (All)
• Browse M
• Subjects

---