Question

What would be the marginal and average tax rates for a corporation with an income level of $100,000?

Answer 1

The marginal tax rate for a corporation with an income level of $100,000 would be 34%. The average tax rate cannot be determined without more information.

Step-by-step explanation:

The marginal tax rate is the tax rate applied to the last dollar of income earned. In the case of a corporation with an income level of $100,000, we need to refer to the tax rate structure provided in the information given. According to the rate structure, there is a flat 34% tax rate on incomes from $335,000 to $10,000,000. Since the income level of $100,000 is below this range, the marginal tax rate would be 34%.

The average tax rate, on the other hand, is calculated by dividing the total tax paid by the total income. However, without information about the exact tax payments for different income levels, we cannot determine the average tax rate for a corporation with an income level of $100,000.

Answer 2

Marginal tax rate = 34%

Average tax rate = 22.25%

Step-by-step explanation:

The marginal tax rate is the rate of tax income earners incur on each additional dollar of income. As the marginal tax rate increases, the taxpayer ends up with less money per dollar earned than he or she had retained on previously earned dollars.

DATA

Income level = 100,000

Corporation Tax rates

0-50,000 = 15%

50,000 - 75,000 = 25%

75,000 - 100,000 = 34%

Marginal tax rate = 34%

Solution

Income tax owed = (15% x 50000)+(25% x 25000)+(34%*25000)

Income tax owed = 22,250

Average tax rate = 22,250/100000

Average tax rate = 22.25%