Tim earns income of 60,000 dinars per year and pays 21,000 per year in taxes.Tim paid 20 percent in taxes on the first 30,000 he earned.What was the marginal tax rate on the second 30,000 he earned?

Question

Quizplus · Accepted Answer

Tim paid 6,000 dinars (20% of 30,000) on the first 30,000. He paid a total of 21,000 in taxes, so he paid 15,000 on the second 30,000. The marginal tax rate on the second 30,000 is 15,000/30,000 = 50%.

Tim Earns Income of 60,000 Dinars Per Year and Pays