(Click the icon here in order to copy the contents of the data table below into a spreadsheet.) Corporate Tax Rate Schedule + + + + Range of taxable income $0 to $50,000 50,000 to 75,000 75,000 to 100,000 100,000 to 335,000 335,000 to 10,000,000 10,000,000 to 15,000,000 15,000,000 to 18,333,333 Over 18,333,333 Base tax $0 7,500 13,750 22,250 113,900 3,400,000 5,150,000 6,416,667 (15% (25% (34% (39% (34% (35% (38% (35% Tax calculation (Marginal rate x amount over base bracket) X amount over $0) X amount over 50,000) X amount over 75,000) X amount over 100,000) x amount over 335,000) X amount over 10,000,000) X amount over 15,000,000) X amount over 18,333,333) + + + + + Marginal corporate tax rates Using the corporate tax rate schedule given here i, perform the following: a. Find the marginal tax rate for the following levels of corporate earnings before taxes: $13,700; $58,700; $90,400; $198,000; $404,000; $1.8 million; and $19.9 million. b. Plot the marginal tax rates (measured on the y axis) against the pretax income levels (measured on the x axis). Explain the relationship between these variables. The marginal tax rate for earnings before taxes of $58,700 is %. (Round to the nearest integer.) The total taxes due for earnings before taxes of $58,700 is $ (Round to the nearest dollar.) The marginal tax rate for earnings before taxes of $90,400 is %. (Round to the nearest integer.) The total taxes due for earnings before taxes of $90,400 is $ (Round to the nearest dollar.) The marginal tax rate for earnings before taxes of $198,000 is %. (Round to the nearest integer.) The total taxes due for earnings before taxes of $198,000 is $ (Round to the nearest dollar.) The marginal tax rate for earnings before taxes of $404,000 is %. (Round to the nearest integer.) The total taxes due for earnings before taxes of $404,000 is $ (Round to the nearest dollar.) The marginal tax rate for earnings before taxes of $1.8 million is %. (Round to the nearest integer.) The total taxes due for earnings before taxes of $1.8 million is $. (Round to the nearest dollar.) The marginal tax rate for earnings before taxes of $19.9 million is %. (Round to the nearest integer.) The total taxes due for earnings before taxes of $19.9 million is $. (Round to the nearest dollar.) b. Plot the marginal tax rates (measured on the y axis) against the pretax income levels (measured on the x axis). The correct shape of the curve is: (Select the best answer below.) Marginal Tax Rate 1% 401- . 400 35 35 30- 30- 25 20- 20- 150 15 10- 10+ 0 500 1.000 1.500 2.000 2.500 Pretax Income (5000) 500 1.000 1.500 2.000 2.500 Pretax Income i9000) OC. OD Q 40- @ a 30- 30- 25 Marginal Tax Rate(%) 25- 20 20- 15 150 10+ 10+ ... Pretax Income ($000) Pretax Income ($000) Explain the relationship between these variables. (Select from the drop-down menus.) As income increases to the marginal tax rate approaches and peaks at For income in excess of the marginal tax rate declines to and after income of the marginal rate increases slightly to
