Suppose the tax rates for single wage earners are: 00000 - 9999 = 0% 10000 - 19999 = 10% 20000...

Question:

Suppose the tax rates for single wage earners are:

00000 - 9999 = 0%

10000 - 19999 = 10%

20000 - 29999 = 22%

30000 - 39999 = 35%

40000 and above = 60%

Calculate the marginal tax rate (MTR) and average tax rate (ATR) for a person earning $15,000 and one earning $35,000.

Marginal and Average Tax Rates:

In paying our income taxes, marginal tax rates refer to taxes paid as a percentage of every additional dollar income. Usually, the matching tax rate of the tax bracket where our income earnings are classified is our marginal tax rate. Average tax rate refers to taxes paid taking into account all preceding brackets where our income earnings pass through up to our highest tax bracket, divided by the total income earnings.

Answer and Explanation:

Answer: Marginal tax rates for the $15,000 and $35,000 are 10% and 35% respectively. Average tax rates are 3.334% ($15,000 earner) and 14.144%...

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