Suppose a partnership and a C corporation both generate $50,000 each for their owners before taxes. Assume each business distributes all income to owners.

a) If the corporate tax rate is 20% and the individual tax rate is 30%, what is the amount of after tax income the partnership owner receives and the corporation owner receives?

b) Using the information from part a), what is the average or effective tax rate on the income generated by the partnership and the corporation respectively?

c) Individuals usually pay income tax based on a progressive schedule where the first X dollars get taxed at a particular % then the dollars between X and Y get taxed and a different rate, etc. Suppose the corporate tax rate is still 20% but the individual tax rate is now the following progressive schedule.