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Scot and Vidia, married taxpayers, earn $241,300 in taxable income and $5,000 in interest from an investment in City of Tampa bonds. (Use the U.S.

Scot and Vidia, married taxpayers, earn $241,300 in taxable income and $5,000 in interest from an investment in City of Tampa bonds. (Use the U.S. tax rate schedule for married filing jointly).

Required:

  1. If Scot and Vidia earn an additional $81,300 of taxable income, what is their marginal tax rate on this income?
  2. What is their marginal tax rate if, instead, they report an additional $81,300 in deductions?

Schedule Y-1-Married Filing Jointly or Qualifying Widow(er)

If taxable income is over: But not over: The tax is:
$ 0 $ 19,900 10% of taxable income
$ 19,900 $ 81,050 $1,990 plus 12% of the excess over $19,900
$ 81,050 $ 172,750 $9,328 plus 22% of the excess over $81,050
$ 172,750 $ 329,850 $29,502 plus 24% of the excess over $172,750
$ 329,850 $ 418,850 $67,206 plus 32% of the excess over $329,850
$ 418,850 $ 628,300 $95,686 plus 35% of the excess over $418,850
$ 628,300 $168,993.50 plus 37% of the excess over $628,300

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