Consider a married couple where the husband and the wife each has $85,000 in taxable earnings. Assume they have no children and all income is from earnings.

Using the information in Table 15-3,

a. Compute their tax liability as a married couple.

b. Compute their tax liability if they live together but are not married.

c. Assuming they are married, compute their marriage bonus or penalty. Is this outcome what you would have expected based on the discussion in the chapter? Explain.

d. Answer the prior questions again, but this time assume that the husband has

$170,000 in taxable earnings and the wife has no earnings. Do your findings differ? If so, explain why.

e. Suppose the wife in part d is deciding whether to enter the labor force. What income tax rate affects this decision? Explain your answer.