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ledzepfan1
Apr 13, 2009, 09:15 PM
How do you calculate a marginal tax rate if all you get are these stats:

Suppose taxes are related to income level as follows:

INCOME / TAXES

$1,000 / $200
$2,000 / $350
$3,000 / $450

What is the marginal tax rate on the first $1,000 of income? The second? The third?

I got the percentages of each tax level, and that it is a regressive tax, but I'm not sure how to calculate the marginal tax rate... with the information given...

I found the answers on a website, but I want to know how to do it, in case it's on the test...

godkilla1211
Oct 31, 2009, 11:59 PM
PLEASE ANSWER THIS QUESTION!!

Consider the following tax structure:

Income Bracket Marginal Tax Rate
$0-$1500 0%
$1501-$2000 14%
$2001-$3000 20%

Mr. Smith has an income of $2500 per annum. Calculate his tax bill for the year. What is his average tax rate? His highest marginal tax rate?

godkilla1211
Nov 1, 2009, 12:01 AM
Re-post my question...

PLEASE ANSWER THIS QUESTION!!

Consider the following tax structure:

Income Bracket:
$0-$1500
$1501-$2000
$2001-$3000

Marginal tax rate:
0%
14%
20%

Mr. Smith has an income of $2500 per annum. Calculate his tax bill for the year. What is his average tax rate? His highest marginal tax rate?

sarafagiri
Nov 15, 2009, 02:00 PM
marginal tax rate = change in amount of tax/the change in income

sarafagiri
Nov 15, 2009, 02:01 PM
What is the relationship between average tax rate and marginal tax rate?