The income tax requires that taxpayers pay 10% on the first $40,000 of income and 20 percent on all income over $40,000.Emily paid $9,000 in taxes.What were her marginal and average tax rates?

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Emily's marginal tax rate is 20% because she pays 20% on income over $40,000. Her average tax rate is calculated by dividing total taxes paid ($9,000) by her total income. If she paid $9,000, she must have earned $50,000 ($4,000 tax on the first $40,000 and $5,000 on the next $10,000). Her average tax rate is $9,000/$65,000 = 13.8%.

The Income Tax Requires That Taxpayers Pay 10% on the First