Q4 D. (20 Marks)

a) How do you define Marginal tax and Average Tax? How does tax impact the net income of a company? (8 Marks)

b) (12 Marks)

TAXABLE INCOME IN DOLLARS
Single Tax Payers	Married Tax Payers filing Joint Returns	Tax rate in %
0-24,000	0 40,000	15
24,001 58,150	40,101 96,900	28
58,151 121,300	96,901 147,700	31
121,301 263,750	147,701 263,750	36
Over 263,750	Over 263,750	39.6

What are the average and marginal tax rates for a single tax payer with a taxable income of $70,000? What are the average and marginal tax rates for married tax payers filing joint returns if their joint taxable income is also $70,000?