Using Excel to find the marginal tax rate can be accomplished using the VLOOKUP function. However, calculating the total tax bill is a little more difficult. Below we have shown a copy of the IRS tax table for an individual for 2011 (the income thresholds are indexed to inflation and change through time.)

In reading this table, the marginal tax rate for taxable income less than $8,500 is 10 percent. If the taxable income is between $8,500 and $34,500, the tax bill is $850 plsu the marginal taxes. The marginal taxes are calculated as the taxable income minus $8,500 times the marginal tax rate of 15 percent.

a. Create a tax table for corporate taxes similar to the individual tax table shown above.

b. For a given taxable income, what is the marginal tax rate?

c. For a given taxable income, what is the total tax bill?

d. For a given taxable income, what is the average tax rate?

If taxable But not The tax is: Income IS Over Over 8,500 10% of the amount over $0 8,500 34,500 $850 plus 15% of the amount over $8,500 34,500 83,600 $4,750 plus 25% of the amount over $34,500 83,600 174,400 $17,025 plus 28% of the amount over $83,600 174,400 379, 150 $42,449 plus 33% of the amount over $174,400 379,150 10,016.50 plus 35% of the amount over $379,150