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: $14,600; $62,000; $88,300; $146,000; $249,000; $451,000; and $1.2 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.

Mule Tax Rate - Single Taxpayers-2018 Range of taxable income $0 to $9,525 9,525 to 38,700 38,700 to 82,500 82,500 to 157,500 157,500 to 200,000 200,000 to 500,000 Over 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 $0) X 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) Print Done