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. Suppose this person earns $70,000 and gives a $1,000 tax deductible donation to charity. The donation reduces her tax payment by

Question

Quizplus · Accepted Answer

The donation reduces the tax payment by $250 because the marginal tax rate is 25%, and a $1,000 donation at this rate would reduce the tax liability by 25% of $1,000, which is $250.