Refer to Scenario 19.2 below to answer the question(s) that follow.
SCENARIO 19.2: An individual earning $40,000 pays $3,200 in taxes. The marginal tax rate on any income earned above $40,000 is 20%.
-Refer to Scenario 19.2. When this person earns $60,000, her tax payment would be

Question

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The individual initially pays $3,200 on the first $40,000. For the additional $20,000 earned (making it $60,000), the tax at a 20% marginal rate would be $4,000 ($20,000 * 20%). Adding this to the initial $3,200 gives a total tax payment of $7,200.