Refer to Scenario 19.1 below to answer the question(s) that follow.
SCENARIO 19.1: An individual earning $60,000 pays $12,000 in taxes. The marginal tax rate on any income earned above $60,000 is 25%.
-Refer to Scenario 19.1. When this person earns $70,000, her tax payment would be

Question

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The individual pays $12,000 on the first $60,000. For the next $10,000 (the increase from $60,000 to $70,000), at a marginal tax rate of 25%, the tax is $2,500 ($10,000 * 0.25). Adding this to the initial $12,000 gives a total tax payment of $14,500.