Suppose that in addition to $5.65 million of taxable income, Texas Taco, Inc. received $800,000 of interest on state-issued bonds and $280,000 of dividends on common stock it owns in Arizona Taco, Inc.

Use the tax schedule in Table 2.3 to calculate Texas Tacos income tax liability. (Enter your answer in dollars not in millions)

Income tax liability

What are Texas Tacos average and marginal tax rates on taxable income? (Round your answers to 2 decimal places.)

Average tax rate	%
Marginal tax rate	%

Table 2.3

Taxable Income	Pay this Amount on Base Income	Plus this Percentage on Anything Over the Base
$0-$50,000	$0	15%
$50,001-$75,000	7,500	25
$75,001-$100,000	13,750	34
$100,001-$335,000	22,250	39
$335,001-$10,000,000	113,900	34
$10,000,001-$15,000,000	3,400,000	35
$15,000,001-$18,333,333	5,150,000	38
Over $18,333,333	6,416,667	35