James earns income of $90,000 per year.His average tax rate is 40%.James paid $5,500 in taxes on the first $40,000 he earned.What was the marginal tax rate on the rest of his income?

Question

Quizplus · Accepted Answer

James's total tax is 40% of $90,000, which is $36,000. He already paid $5,500 on the first $40,000. Therefore, he paid $36,000 - $5,500 = $30,500 on the remaining $50,000. The marginal tax rate is $30,500 / $50,000 = 61%.

James Earns Income of $90,000 Per Year