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Suppose in Fiscalville there is a 0 percent tax on the first $10,000 of income, but a 20 percent tax on earnings between $10,000 and
Suppose in Fiscalville there is a 0 percent tax on the first $10,000 of income, but a 20 percent tax on earnings between $10,000 and $20,000 and a 30 percent tax on income between $20,000 and $30,000. Any income above $30,000 is taxed at 40 percent.
Instructions:Round your answers to the nearest whole number.
a. If your income is $40,000, how much will you pay in taxes?
b. Determine your marginal tax rate.
c. Determine your average tax rate.
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