Average corporate tax rates Using the corporate tax rate schedule given here perform the following:

Corporate Tax Rate Schedule Tax calculation Range of taxable income Base tax + (Marginalrate amount over base bracket) $0 to $50,000 $0 + (15% amount over $0) 50,000 to 75,000 7,500 + (25 amount over 50,000) 75,000 to 100,000 13,750 + (34 amount over 75,000) 100,000 to 335,000 22,250 + (39 amount over 100,000) 335,000 to 10,000,000 113,900 + (34 amount over 335,000) 10,000,000 to 15,000,000 3,400,000 + (35 amount over 10,000,000) 15,000,000 to 18,333,333 5,150,000 + (38 amount over 15,000,000) Over 18,333,333 6,416,667 + (35 amount over 18,333,333)

a. Calculate the tax liability, after-tax earnings, and average tax rates for the following levels of corporate earnings before taxes: $12,300; $79,900; $298,000; $503,000; $1.7 million; $9.5 million; and $20.3 million.

b. Plot the average tax rates (measured on the y axis) against the pretax income levels (measured on the x axis). What generalization can be made concerning the relationship between these variables?