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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
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: $15,000; $60,000; $90,000; $150,000; $250,000; $450,000; and $1.0 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. a. The marginal tax rate for earnings before taxes of $15,000 is %. (Round to the nearest integer.)
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