Kathy works full time during the day as an economist and faces a 90 percent marginal tax rate. If Kathy were to get an offer to work a second job in the evenings doing consulting work for a local business for $10,000 per year, how much of this additional income would she be able to keep as net pay after taxes?
A) $1,000
B) $4,000
C) $6,000
D) $10,000

Question

Quizplus · Accepted Answer

Kathy faces a 90% marginal tax rate, meaning she would pay 90% of her additional income in taxes. Therefore, she would keep 10% of the $10,000, which is $1,000.

Kathy Works Full Time During the Day as an Economist