Go to the website http://users.nber.org/~taxsim/taxsim-calc9/ This site estimates income taxes based on income and other characteristics. Scroll down to OR Calculate liabilities. Click the button for Wage Income. Weve not discussed income taxes in any detail, so well keep it simple for now and just assume that all the income are wages. Compare the tax liability for three individuals, named A, B and C in 2013. All are unmarried without children. A earns $20,000 per year, B earns $90,000 per year, and C $150,000 per year.

What are the marginal tax rates (line 7) and total federal tax level (line 19) and average tax rates (line 19/earnings)?

Now suppose that A and C are a couple that share their bank accounts but are unmarried. They file their taxes individually. What is the average tax rate for earnings for this couple? How about the same situation for B and C?

What if the same couples were married? Change the simulation accordingly and calculate the marginal and average tax rates.

Comment on what you observed in parts b and c.