Marginal tax rates Partner A, a single taxpayer, is one of two partners in a small business. As such, she receives pass-through income that is taxed at her personal tax rates. After all adjustments and deductions have been made, including the 20% qualified business income deduction, she is preparing to calculate her taxes owed for the year. Using the tax rate schedule given here perform the following:

a. Find the marginal tax rate for the following levels of sole proprietorship earnings before taxes:

$15,400

$60,600

$91,500

$146,000

$255,000

$452,000

$1.4 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.