Government G levies an income tax with the following rate structure.
Percentage RateBracket
6% ………………….Income from –0– to $30,000
10 ………………….Income from $30,001 to $70,000
20 ………………….Income from $70,001 to $200,000
28 ………………….Income in excess of $200,000
a. Taxpayer A’s annual income is $119,400. Compute A’s tax and average tax rate. What is A’s marginal tax rate?
b. Taxpayer B’s annual income is $383,900. Compute B’s tax and average tax rate. What is B’s marginal tax rate?