Question
Suppose you are a typical person in the US economy. You pay 15.3 % of your labor earnings in federal payroll taxes. (employer and employee
Suppose you are a typical person in the US economy. You pay 15.3 % of your labor earnings in federal payroll taxes. (employer and employee shares combined), and 4% flat state income taxes. If the federal marginal income tax rate is 10% from $0 to $9,325 of taxable income, 15% from $9,326 to $37,950 of taxable income and 25% from $37,951 to $91,900 of taxable income and 39,6% above $91,901 and you make $30,000 a year, how much of each tax do you pay? What is your marginal and average tax rates? What happens to your tax bill and to your marginal and average tax rate if your income rises to $60,000? Show work
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