What do you pay taxes on? Suppose you earned $20,000 and paid 10% tax on the...

What do you pay taxes on? Suppose you earned $20,000 and paid 10% tax on the first $10,000 and 20% on all the money you earned above $10,000. What would by your total tax (as a dollar amount)? What would be your average tax (as a %)? What would be your marginal tax (tax on last dollar)?

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Expert Solution

One pays taxes on income earned

Total tax amount is given as=10%*10000+20%*(20000-10000)=3000.00

Average tax rate=3000.00/20000=15.0000%

Marginal tax rate=20%

jeff jeffy answered 1 year ago

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