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a. Find the marginal tax rate for the following levels of sole proprietorship earnings before​ taxes: $16,800​; $59,500​; $89,600​; $151,000​; $245,000​; $451,200​; $1,000,000   b. Plot the marginal tax rates​ (measured on the ​y-​axis) against the pretax income levels​ (measured on the ​x-​axis).

a. Find the marginal tax rate for the following levels of sole proprietorship earnings before​ taxes: $16,800​; $59,500​; $89,600​; $151,000​; $245,000​; $451,200​; $1,000,000   b. Plot the marginal tax rates​ (measured on the ​y-​axis) against the pretax income levels​ (measured on the ​x-​axis).

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Marginal tax rates   Using the tax rate schedule attached
​
Perform the​ following:
a. Find the marginal tax rate for the following levels of sole proprietorship earnings before​ taxes:
$16,800​;
$59,500​;
$89,600​;
$151,000​;
$245,000​;
$451,200​;
$1,000,000
 
b. Plot the marginal tax rates​ (measured on the
​y-​axis)
against the pretax income levels​ (measured on the
​x-​axis).
Tax Rates Schedule Range of taxable income $0 to 9,876 to 40,126 to 85,526 to 163,301 to 207,351 to 518,401 to $9,875 40,125 85,525 163,300 207,350 518,400 Unlimited Base tax + $0 + (10% 988 + (12% 4,618 + (22% 14,606 + (24% 33,272 + (32% 47,368 + (35% 156,235 + (37% (Marginal rate x amo x amount over x amount over x amount over x amount over x amount over x amount over x amount over
Transcribed Image Text:Tax Rates Schedule Range of taxable income $0 to 9,876 to 40,126 to 85,526 to 163,301 to 207,351 to 518,401 to $9,875 40,125 85,525 163,300 207,350 518,400 Unlimited Base tax + $0 + (10% 988 + (12% 4,618 + (22% 14,606 + (24% 33,272 + (32% 47,368 + (35% 156,235 + (37% (Marginal rate x amo x amount over x amount over x amount over x amount over x amount over x amount over x amount over
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