Assume that the marginal tax rate is 10 percent for the first $10,000 of income,20 percent for income between $10,000 and $40,000,and 30 percent for any income over $40,000.If Jerome has taxable income equal to $60,000 for the year,what is his tax bill?

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Quizplus · Accepted Answer

Jerome's tax bill can be calculated by applying the marginal tax rates to the respective income brackets. For the first $10,000, he pays 10% which is $1,000. For the next $30,000 ($10,000 to $40,000), he pays 20% which is $6,000. For the remaining $20,000 ($40,000 to $60,000), he pays 30% which is $6,000. Adding these amounts together gives a total tax bill of $13,000.

Assume That the Marginal Tax Rate Is 10 Percent for the First