Leah earned $88,000 in taxable income in 2018 and paid $19,360 in taxes. Leah earned $89,910 in taxable income in 2019 and paid $19,837.50 in taxes.

Leah earned $88,000 in taxable income in 2018 and paid $19,360 in taxes. Leah earned $89,910 in taxable income in 2019 and paid $19,837.50 in taxes. What is Leah’s 2019 marginal tax rate?

23%

25%

34%

22%

Expert Solution

- 2019's Marginal Tax rate = (2019's Taxes - 2018's Taxes)/(2019's Taxable Income - 2018's Taxable Income)

2019's Marginal Tax rate = ($19837.50 - $19,360)/($89,910 - $88,000)

2019's Marginal Tax rate = $477.50/$1910

2019's Marginal Tax rate = 25%

Option 2

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