Alan Is a Single Taxpayer with a Gross Income of $88,000

question 75

Multiple Choice

Alan is a single taxpayer with a gross income of $88,000, a taxable income of $66,000, and an income tax liability of $12,356. Josh also has $8,000 of tax-exempt interest income. What are Alan's marginal, average, and effective tax rates?

• A) 25% marginal; 16.7% average; 18.7% effective.
• B) 28% marginal; 15.9% average; 21.5% effective.
• C) 28% marginal; 16.7% average; 21.5% effective.
• D) 25% marginal; 18.7% average; 16.7% effective.

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Definitions:

Conditioned Response

A conditioned reaction acquired through training to a stimulus that usually doesn't elicit a response.

Unconditioned Stimulus

In traditional conditioning, a stimulus that inherently and effortlessly elicits a reaction without the need for prior learning.

Unconditioned Response

An instinctive, unlearned reaction to an external stimulus that takes place without beforehand learning or conditioning.

Classical Conditioning

A learning process wherein a neutral stimulus becomes associated with a meaningful stimulus, leading to a conditioned response.