Sue earns income of $80,000 per year. Her average tax rate is 40 percent. Sue paid $4,500 in taxes on the first $30,000 she earned. What was the marginal tax rate on the rest of her income?

Question

Quizplus · Accepted Answer

Sue's total tax is 40% of $80,000, which is $32,000. She paid $4,500 on the first $30,000, leaving $27,500 in taxes on the remaining $50,000. The marginal tax rate is $27,500 / $50,000 = 55%.

Sue Earns Income of $80,000 Per Year