Given the following rates for the income tax, calculate this person's average tax rate for a...

Given the following rates for the income tax, calculate this person's average tax rate for a taxable income of $70,000 Please show your work

Income bracket        Marginal tax rate
$0- $10,000                    10%
$10,000 - $30,000           20%
$30,000 - $60,000           25%
$60,000 - $80,000         30%
Over $100,000                40%

Expert Solution

Total tax paid by the person = (10,000 * 0.10) + (20,000 * 0.20) + (30,000 * 0.25) + (10,000 * 0.30)

= 1,000 + 4,000 + 7,500 + 3,000

= $15,500

Average tax rate = (Total tax paid / Taxable income) * 100

= (15,500 / 70,000) * 100

= 22.14%

Thus, this person's average tax rate is 22.14%.

Rahul Sunny answered 2 years ago

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