
Martavius faces a progressive federal income tax structure that has the following marginal tax rates: 0 percent on the first $10,000,10 percent on the next $10,000,15 percent on the next $10,000,25 percent on the next $10,000,and 50 percent on all additional income.In addition,he must pay five percent of his income in provincial income tax and 15.3 percent of his labour income in federal payroll taxes.Martavius earns $70,000 per year in salary and another $20,000 per year in nonlabour income.What is his average tax rate,and what is the marginal tax rate on his salary
A) His average tax rate is 50.23 percent, and the marginal tax rate on his salary is 55 percent.
B) His average tax rate is 50.23 percent, and the marginal tax rate on his salary is 70.3 percent.
C) His average tax rate is 53.63 percent, and the marginal tax rate on his salary is 55 percent.
D) His average tax rate is 53.63 percent, and the marginal tax rate on his salary is 70.3 percent.
Correct Answer:
Verified
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