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

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

Step-by-step 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

=
`(change\ in\ tax)/(change\ in\ taxable\ income)`

=
`(5571 - 4636)/(6000)`

=
`(935)/(6000)`

= 0.1558

So the marginal tax rate is 15.58%.