Table 18-6
Table 18-6 shows the income tax brackets and tax rates for single taxpayers in Monrovia.
-Refer to Table 18-6.Sylvia is a single taxpayer with an income of $70,000.What is her marginal tax rate and what is her average tax rate?

Question

Table 18-6
  Table 18-6 shows the income tax brackets and tax rates for single taxpayers in Monrovia.
-Refer to Table 18-6.Sylvia is a single taxpayer with an income of $70,000.What is her marginal tax rate and what is her average tax rate?

Quizplus · Accepted Answer

Looking at Table 18-6, we can see that an income of $70,000 falls into the 30% tax bracket. Therefore, Sylvia's marginal tax rate is 30%. To calculate her average tax rate, we need to determine how much tax she paid on all of her income. The first $20,000 is taxed at 10%, which equals $2,000. The next $30,000 is taxed at 20%, which equals $6,000. The remaining $20,000 is taxed at 30%, which equals $6,000. So in total, Sylvia paid $14,000 in taxes on an income of $70,000. To find her average tax rate, we divide her total tax paid by her total income, which equals 20%. Therefore, Sylvia's average tax rate is 22.5%.

Table 18-6 Table 18-6 Shows the Income Tax Brackets and Brackets