Question

Suppose the U.S. government exempts the first $20,000 in household income from taxation (or in other words, the tax rate is 0% on the first $20,000 of income), but other than that provides no tax exemptions. On all remaining income, the U.S. government imposes a 10% tax rate on the first $30,000 of taxable income, a 20% tax rate on the next $70,000 of taxable income, and a 30% tax rate on all remaining taxable income.
Moreover, suppose that the State of Utah also imposes an additional income tax of 5% on ALL income (i.e., first $20,000 not exempt). However, the State of Utah provides a nonrefundable tax credit of $1,200. This tax credit phases out 2 cents for each dollar that total income exceeds $40,000.
Fill in the blanks denoted by the highlighted cells. Note that extra table cells are added to facilitate calculation, but not all spaces are questions.  Calculate the effective tax rates / effective marginal tax rate with respect to TOTAL income.
	Federal Taxes				State Taxes
Total Income	Federal Taxable Income	Federal Tax Liability	Federal Effective Tax Rate (Average Tax Rate with Respect to Total Income)	Federal Statutory Marginal Tax Rate	State Tax Before Credit	State Tax Credit	State Tax Liability	State Average Tax Rate	State Effective Marginal Tax Rate
$30,000			1	5				9	13
$60,000			2	6				10	14
$90,000			3	7				11	15
$150,000			4	8				12	16

Answer 1

			A	B=A-20000	C	D=(C/A)*100%		E=5%*A	F=2%*(A-40000) if A>40000	G=E-F	H=(G/A)*100%	I
			Federal Taxes				State Taxes
			Total Income	Federal Taxable Income	Federal Tax Liability	Federal Effective Tax Rate (Average Tax Rate with Respect to Total Income)	Federal Statutory Marginal Tax Rate	State Tax Before Credit	State Tax Credit	State Tax Liability	State Average Tax Rate	State Effective Marginal Tax Rate
			$30,000	$10,000	$1,000	3.3%	10.0%	$1,500	$0	$1,500	5.0%	5%
			$60,000	$40,000	$5,000	8.3%	20.0%	$3,000	$400	$2,600	4.3%	3.0%
			$90,000	$70,000	$11,000	12.2%	20.0%	$4,500	$1,000	$3,500	3.9%	3.0%	(3500-2600)/(90000-60000)
			$150,000	$130,000	$32,000	21.3%	30.0%	$7,500	$2,200	$5,300	3.5%	3.0%
		Federal Tax Liability for $30000 total Income	$1,000	(10%*10000)
		Federal Tax Liability for $60000 total Income	$5,000	10%*30000+20%*(40000-30000)
		Federal Tax Liability for $90000 total Income	$11,000	(5000+20%*(70000-40000)
		Federal Tax Liability for $150000 total Income	$32,000	(11000+20%(30000+70000-70000)+30%(150000-100000)
		Marginal tax rate of state taxes for income above $40000:
		For Total income of $40000, Tax=5%*40000=	$2,000
		For Total income of $60000, Tax Liability	$2,600
		Marginal Tax	$600
		Marginal Income=60000-40000	20000
		Marginal tax rate =600/20000	3.0%