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# Question: marginal tax rates partner a a single taxpayer is one...

###### Question details

Marginal tax rates   Partner​ A, a single​ taxpayer, is one of two partners in a small business. As​ such, she receives​ pass-through income that is taxed at her personal tax rates. After all adjustments and deductions have been​ made, including the​ 20% qualified business income​ deduction, she is preparing to calculate her taxes owed for the year.

Using the tax rate schedule given here​,

$0 to$9,525    $0 + (10% amount over$0)
9,525 to    38,700    953    +   (12%   amount over   9,525)
38,700 to    82,500    4,454    +   (22%   amount over   38,700)
82,500 to    157,500    14,090    +   (24%    amount over   82,500)
157,500 to    200,000    32,090    +   (32%    amount over   157,500)
200,000 to    500,000    45,690    +   (35%    amount over   200,000)
500,000 to        150,690    +   (37%    amount over   500,000)
+       amount over

a. Find the marginal tax rate for the following levels of sole proprietorship earnings before​ taxes:

$16 000;$ 61900​; $88100 ​;$ 148000 ​; $246000 ;$ 454000 ; and \$ 1.1million.

b. Plot the marginal tax rates​ (measured on they-​axis) against the pretax income levels​ (measured on the x-​axis). Explain the relationship between these variables.