Here are the current tax rates in the$$ US$,$ which we discussed in Chapter $1.$

Top marginal tax$$ rates, federal:

$$ Corporate: $21\%$

$$ Personal, on$$ income: $40\mathrm{.}8\%$

$$ Personal, on dividends$$ & capital$$ gains: $23\mathrm{.}8\%$

State of Illinois tax$$ rates:

$$ Corporate: $9\mathrm{.}5\%$

$$ Personal: $4\mathrm{.}95\%$

For an Illinois corporation$($a c$-$corp$)$ with Illinois$$ shareholders, what is the$$ total, combined tax rate that will be paid on$$ pre$-$tax profits$($using the top marginal rates and assuming that the profits are paid out as$$ dividends$)?$

A$.$

$30\mathrm{.}5\%$

B$.$

$59\mathrm{.}25\%$

C$.$

$28\mathrm{.}5\%$

D$.$

$21\%$

E$.$

$40\mathrm{.}8\%$

F$.$

$28\mathrm{.}75\%$

G$.$

$27\mathrm{.}6\%$

H$.$

$48\mathrm{.}2\%$

I.

$9\mathrm{.}5\%$

J$.$

$23\mathrm{.}8\%$