Marginal and average tax rates Using the tax rate schedule given here:

a. Calculate the tax liability, after-tax earnings, and average tax rates for the following levels of partnership earnings before taxes: $10,100; $82,100; $303,000; $492,000; $1.2 million; $1.5 million; $1.8 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?

Corporate Tax Rate Schedule Range of taxable income $0) $0 to 9,525 to 38,700 to 82,500 to 157,500 to 200,000 to Over 500,000 $9,525 38,700 82,500 157,500 200,000 500,000 Base tax $0 953 4,454 14,090 32,090 45,690 150,690 + + (10% + (12% + (22% (24% + (32% + (35% + (37% Tax calculation (Marginal rate x amount over base bracket) X amount over * amount over 9,525) X amount over 38,700) x amount over 82,500) X amount over 157,500) x amount over 200,000) X amount over 500,000) +