Question

arlene is single and ahas taxable income of $34000. her tax liability is currently $4636. she has the opportunity to earn an additional $6000 this year. her tax liability will grow to $5771 if she receives the additional income. what is arlene's marginal tax rate for the additional $6000?

Answer 1

Answer:

The marginal tax rate for the additional $6000 is 15.58%.

Explanation:

Arlene has a taxable income of $34,000.

Her tax liability is currently $4636.

Her income is to be increased by $6000.

Her tax liability will increase to $5571.

Marginal tax rate

= $\frac{change\ in\ tax}{change\ in\ taxable\ income}$

= $\frac{5571 - 4636}{6000}$

= $\frac{935}{6000}$

= 0.1558

So the marginal tax rate is 15.58%.