Terry is a worker in the country Pretoria. His salary is $46,000 and his taxable income is $52,000. Pretoria imposes a Worker Tax as follows:

Employers withhold a tax of 20% of all wages and salaries. If taxable income as reported on the employee's income tax return is greater than $50,000, an additional 10% tax is withheld on all income. Terry's marginal tax rate is:

Question

Terry is a worker in the country Pretoria. His salary is $46,000 and his taxable income is $52,000. Pretoria imposes a Worker Tax as follows:
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Employers withhold a tax of 20% of all wages and salaries. If taxable income as reported on the employee's income tax return is greater than $50,000, an additional 10% tax is withheld on all income. Terry's marginal tax rate is:

Quizplus · Accepted Answer

Terry's marginal tax rate is 30% because he pays a 20% tax on all wages and an additional 10% on all income since his taxable income exceeds $50,000.

Terry Is a Worker in the Country Pretoria