Mr. Erwins marginal tax rate on ordinary income is 37 percent. His $958,000 AGI included a $24,900 net long-term capital gain and $37,600 business income from a passive activity. Use Individual tax rate schedules and Tax rates for capital gains and qualified dividends.

1. Compute Mr. Erwins income tax on the $62,500 investment income from these two sources.
2. Compute Mr. Erwins Medicare contribution tax if the $62,500 is his net investment income for the year. What is Mr. Erwins marginal tax rate on long-term capital gain and on passive activity income?