Question

Assume that Bill's marginal tax rate is 40. What is the amount of tax Bill would pay if his income is $100?

1) 10
2) 16.67
3) 8
4) 6
5) None of the Above

Answer 1

The tax Bill would pay if his income is $100 and his marginal tax rate is 40% is $40. None of the given options are correct.

Step-by-step explanation:

Assuming that Bill's marginal tax rate is 40%, to calculate the amount of tax he would pay on an income of $100, we simply apply the marginal tax rate to the income. Therefore, Bill's tax payment would be 40% of $100, which is calculated as 0.40 × $100 = $40.

However, the options given do not include $40, hence the correct answer to the question is 5) None of the Above.