5. Explain the difference between an excise, corporate, payroll, & income tax rates.(a) Suppose that Leia lives on Alderaan. On the planet of Alderaan, income is taxed in aprogressive manner. Thus, the first $10,000 of income is taxed at a rate of 5%. Any incomeearned above $10,000 is taxed at a rate of 20%. Suppose that Leia earns $55,000 in 2019. Whatis Leia's average tax rate? What is Leia's marginal tax rate?

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5. Explain the difference between an excise, corporate, payroll, & income tax rates.

ENGR.ECONOMIC ANALYSIS

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Chapter1: Making Economics Decisions

Section: Chapter Questions

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5. Explain the difference between an excise, corporate, payroll, & income tax rates.
(a) Suppose that Leia lives on Alderaan. On the planet of Alderaan, income is taxed in a
progressive manner. Thus, the first $10,000 of income is taxed at a rate of 5%. Any income
earned above $10,000 is taxed at a rate of 20%. Suppose that Leia earns $55,000 in 2019. What
is Leia's average tax rate? What is Leia's marginal tax rate?

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