This year, Abigail earned $15,000 and she paid 15 percent in income and payroll taxes. She qualified for Medicaid and food stamps. For every $100 that she earns, Abigail loses $35 in Medicaid benefits and $15 in food stamps. Abigail faces an effective marginal tax rate of

Question

Quizplus · Accepted Answer

Abigail's effective marginal tax rate includes the 15% she pays in taxes plus the $35 loss in Medicaid benefits and $15 loss in food stamps for every $100 earned, totaling 65%.

This Year, Abigail Earned $15,000 and She Paid 15 Percent