Suppose the Income Tax Rate Schedule Is 0% on the First

question 126

Multiple Choice

Suppose the income tax rate schedule is 0% on the first $10,000;10% on the next $20,000;20% on the next $20,000;30% on the next $20,000;and 40% on any income over $70,000.Family A earns $28,000 a year and Family B earns $65,000 a year.Both receive a ten percent raise.What is the marginal tax rate of each and what is the extra tax paid by each after the raise?

• A)Family A: 20% marginal tax rate and $560 in extra taxes.Family B: 40% marginal tax rate and $2,600 in extra taxes.
• B)Family A: 15% marginal tax rate and $420 in extra taxes;Family B: 35% marginal tax rate and $2,275 in extra taxes.
• C)Family A: 20% marginal tax rate and $360 in extra taxes;Family B: 40% marginal tax rate and $2,100 in extra taxes.
• D)Family A: 10% marginal tax rate and $280 in extra taxes;Family B: 30% marginal tax rate and $1,950 in extra taxes.

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Definitions:

Social Psychology

The examination of individual thoughts, emotions, and actions within societal environments through a scientific lens.

Boards and Journals

Refers to editorial or governing bodies overseeing the publication of academic or professional journals, ensuring rigor and quality in disseminated research.

Attribution Theory

A theory focused on how people interpret and understand cause and effect in social contexts, particularly how people attribute causes to actions and events.

Discourse Analysis

A methodological and analytical approach to studying written, spoken, or sign language use, or any significant semiotic event.