Marginal and average tax rates Using the tax rate schedule given in Table 1.2, per-form the following: a. Calculate the tax liability, after-tax earnings, and average tax rates for the fol-lowing levels of partnership earnings before taxes: $10,000; $80,000; $300,000; $500,000; $1 million; $1.5 million; and $2 million. b. Plot the average tax rates (measured on the y-axis) against the pretax income lev-els (measured on the x-axis). What generalization can be made concerning the relationship between these variables?

Taxable income brackets		Base tax		+	(Marginal rate X amount over bracket lower limit)
$	0 to $50,000	$	0	+	(15% X amount over $ 0)
50,000 to 75,000		$	7,500	+	(25% X amount over $ 50,000)
75,000 to 100,000		$	13,750	+	(34% X amount over $ 75,000)
100,000 to 335,000		$	22,250	+	(39% X amount over $ 100,000)
335,000 to 10,000,000		$	113,900	+	(34% X amount over $ 335,000)
10,000,000 to 15,000,000		$	3,400,000	+	(35% X amount over $ 10,000,000)
15,000,000 to 18,333,333		$	5,150,000	+	(38% X amount over $ 15,000,000)
Over 18,333,333		$	6,416,667	+	(35% X amount over $ 18,333,333)