Using the individual tax rate schedule. perform the following: a. Calculate the tax liability, after-tax earnings, and average tax rates for the following levels of partnership earnings before taxes: $13,100; $77,200; $324,000; $499,000; $1.2 million; $1.6 million; and $2.3 million. b. Plot the average tax rates (measured on the y-axis) against the pretax income levels (measured on the x-axis). What generalization can be made concerning the relationship between these variables?
Using the individual tax rate schedule. perform the following: a. Calculate the tax liability, after-tax earnings, and average tax rates for the following levels of partnership earnings before taxes: $13,100; $77,200; $324,000; $499,000; $1.2 million; $1.6 million; and $2.3 million. b. Plot the average tax rates (measured on the y-axis) against the pretax income levels (measured on the x-axis). What generalization can be made concerning the relationship between these variables?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Data table
(Click the icon here
in order to copy the contents of the data table below into a spreadsheet.)
TABLE 1.2: Federal Income Tax Rates and Brackets for Individual Returns (2018)
Tax Rates
10.0%
12.0%
22.0%
24.0%
32.0%
35.0%
37.0%
Taxable Income
$0 to $9,875
$9,876 to $40,125
$40,126 to $85,525
$85,526 to $163,300
$163,301 to $207,350
$207,351 to $518,400
Over $518,401
Print
Taxes
10% of taxable income
$987.50, plus 12% of the amount over $9,875
$4,617.50, plus 22% of the amount over $40,125
$14,605.50, plus 24% of the amount over $85,525
$33,271.50, plus 32% of the amount over $163,300
$47,367.50, plus 35% of the amount over $207,350
$156,235.50, plus 37% of the amount over $518,400
Done
- X
ac
Transcribed Image Text:Using the individual tax rate schedule perform the following:
a. Calculate the tax liability, after-tax earnings, and average tax rates for the following levels of partnership earnings
before taxes: $13,100; $77,200; $324,000; $499,000; $1.2 million; $1.6 million; and $2.3 million.
b. Plot the average tax rates (measured on the y-axis) against the pretax income levels (measured on the x-axis). What
generalization can be made concerning the relationship between these variables?
ACCER
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