1. (2.5 points) Assume that the taxable income Serena Williams pulled in from endorsements, tournament prizes, and other sources during 2020 was $36,000,000. For simplicity, let's assume that we have already subtracted the standard deduction and also that she files her income taxes separately so that we can continue use the table of tax brackets we have already been using at lecture. 2. What is Serena Williams' marginal tax rate for 2020P Briefly explain. % Serena Williams' marginal tax rate for 2020 b. Calculate the amount of income tax that Serena Williams would owe for 2020. Show your work. If necessary, round your answer to the nearest dollar. amount of income tax Serena Williams will owe for 2020 c. Given her taxable income listed above, what would the average tax rate for Serena Williams' federal income tax be? Show your work. Express your answer as a percentage and round that percentage to two decimal places. % Serena Williams' average tax rate for 2020 rate die manier Over the last couple of years has been some attention given to-and sometimes hypothetical misunderstanding about--a proposal from Representative Alexandra Ocasio- 2020 federal tax brackets Cortez (NY-14) and others to add an additional tax bracket for extremely high earners, in which earnings above $10,000,000 would be taxed at a marginal tax single filers rate of 70%, which was the highest marginal rate between 1964 and 1982. (It 10% $0 to $9.875 was even higher before 1964.) 12% $9,875 to $40,125 Let's pretend this policy had been enacted for 2020 earnings and see what that 22% $40,125 to $85,525 would have done to Serena Williams' hypothetical income taxes for 2020. Use 24% $85,525 to $163,300 the hypothetical tax table at the right to complete the remaining parts of this 32% $163,300 to $207,350 question. Again, for simplicity assume that her taxable income is $36,000,000 35% $207,350 to $518,400 and that we use the single status table. 37% $518,400 to $10,000,000 d. Calculate the amount of income tax that Serena Williams would owe for 70% more than $10,000,000 2020 under this hypothetical set of tax brackets. Show your work. If necessary, round your answer to the nearest dollar. [HINT: You do not need to repeat all of your work from part (b) above-just re-do some of it.) amount of income tax Serena Williams would owe for 2020 under these hypothetical brackets CISSORS rate of 70%, which was the highest marginal rate between 1964 and 1982. (It 10% $0 to $9,875 was even higher before 1964) 12% $9,875 to $40,125 Let's pretend this policy had been enacted for 2020 carnings and see what that 22% $40,125 to $85,525 would have done to Serena Williams' hypothetical income taxes for 2020. Use 24% $85,525 to $163,300 the hypothetical tax table at the right to complete the remaining parts of this 32% $163,300 to $207,350 question. Again, for simplicity assume that her taxable income is $36,000,000 35% $207,350 to $518,400 and that we use the single status table. 37% $518,400 to $10,000,000 d. Calculate the amount of income tax that Serena Williams would owe for 70% 2020 under this hypothetical set of tax brackets. Show your work. If more than $10,000,000 necessary, round your answer to the nearest dollar. [HINT: You do not need to repeat all of your work from part (b) above-just re-do some of it.] amount of income tax Serena Williams would owe for 2020 under these hypothetical brackets c. Given her taxable income listed above, what would be the average tax rate for Serena Williams' federal income tax for 2020 under this hypothetical scenario Show your work. Express your answer as a percentage and round that percentage to two decimal places. Serena Williams' average tax rate for 2019 under these hypothetical brackets 94 page 2 of 6
