Question

complete all parts please. thank you

Marginal tax rates Partner A, a single taxpayer, is one of two partners in a small business. As such, she receives pass-through income that is taxed at her personal tax rates. After all adjustments and deductions have been made, including the 20% qualified business income deduction, she is preparing to calculate her taxes owed for the year. Using the tax rate schedule given here 1, perform the following: a. Find the marginal tax rate for the following levels of sole proprietorship earnings before taxes: $13,600; $58,100; $88,000; $152,000; $247,000; $446,000; and $1.4 million. b. Plot the marginal tax rates (measured on the y-axis) against the pretax income levels (measured on the x-axis). Explain the relationship between these variables. a. The marginal tax rate for earnings before taxes of $13,600 is 12 %. (Round to the nearest integer.) The total taxes due for earnings before taxes of $13,600 is $ (Round to the nearest dollar.)

Answer 1

Hi, Below is the marginal rate and tax due:

Earnings Before Tax	Marginal Rate	Tax due
		Base Tax	Amount Over Base Bracket	Marginal Tax	Total Tax
$13,600	12%	$953	$4,075	$489	$1,442
$58,100	22%	$4,454	$19,400	$4,268	$8,722
$88,000	24%	$14,090	$5,500	$1,320	$15,410
$152,000	24%	$14,090	$69,500	$16,680	$30,770
$247,000	35%	$45,690	$47,000	$16,450	$62,140
$446,000	35%	$45,690	$246,000	$86,100	$131,790
$1,400,000	37%	$150,690	$900,000	$333,000	$483,690

Total tax has been calculated by adding the base tax and marginal tax.

Below is the graph:

Graph of Income Tax $1,600,000 $1,400,000 $1,200,000 $1,000,000 $800,000 $600,000 $400,000 $200,000 $0 $100,000 $200,000 $300,000 $400,000 $500,000 $600,000

You may see that the curve is very steep and depicts that the person with higher income is charged higher tax rate and low income is charged lower tax rate.