Question
1) In 2020, Elizabeth has a total income of $140,000, and no deductions. Suppose that she has tax credits in two categories basic personal and
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1) In 2020, Elizabeth has a total income of $140,000, and no deductions. Suppose that she has tax credits in two categories basic personal and spousal. Suppose that her spouse has an income of $5,000.
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(a) (3 points) How much income tax does the couple have to pay for this year?
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(b) (2 points) What are Elizabeth's marginal tax rates for interest, capital gain and dividend income?
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(c) (3 points) Suppose instead that the couple's income (i.e., $140,000 + $5,000 = $145,000) is divided evenly between them (i.e., each person makes $72,500). How much income tax does the couple have to pay?
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(d) (2 points) Calculate Elizabeth's marginal tax rates for interest, capital gain and dividend income based on her income in (c).
1) In 2020, Elizabeth has a total income of $140,000, and no deductions. Suppose that she has tax credits in two categories basic personal and spousal. Suppose that her spouse has an income of $5,000.
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(a) (3 points) How much income tax does the couple have to pay for this year?
-
(b) (2 points) What are Elizabeth's marginal tax rates for interest, capital gain and dividend income?
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(c) (3 points) Suppose instead that the couple's income (i.e., $140,000 + $5,000 = $145,000) is divided evenly between them (i.e., each person makes $72,500). How much income tax does the couple have to pay?
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(d) (2 points) Calculate Elizabeth's marginal tax rates for interest, capital gain and dividend income based on her income in (c).
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