economics
posted by Margary .
Suppose the income tax rate schedule is 0 percent on the first $10,000; 10 percent on the next $20,000; 20 percent on the next $20,000; 30 percent on the next $20,000; and 40 percent on any income over $70,000. Family A earns $28,000 a year and Family B earns $65,000 a year. Both receive a ten percent raise. What is the marginal tax rate of each and what is the extra tax paid by each after the raise?
A. Family A: 20 percent marginal tax rate and $560 in extra taxes. Family B: 40 percent marginal tax rate and $2600 in extra taxes.
B. Family A: 20 percent marginal tax rate and $360 in extra taxes; Family B: 40 percent marginal tax rate and $2100 in extra taxes.
C. Family A: 15 percent marginal tax rate and $420 in extra taxes; Family B: 35 percent marginal tax rate and $2275 in extra taxes.
D. Family A: 10 percent marginal tax rate and $280 in extra taxes; Family B: 30 percent marginal tax rate and $1950 in extra taxes.

!!!***URGENT***!!! 
Margary
Is the answer D?
(I picked D I think the marginal tax rates are correct, but I'm not sure how to calculate the extra tax paid) 
economics 
economyst
I think the correct answer is B.
For A, income goes from 28000 to 30800, a change of 2800. Since the new income is between 30000 and 50000, the mtr is 20%. Of the change in income of 2800, 2000 was taxed at the 10% rate and the remaining 800 was taxed at the 20% rate. So, .1*2000+.2*800 = 360.
Repeat for Family B.
Respond to this Question
Similar Questions

Chemistry
Income tax for some states is computed by taking 3% of the excess income over $3,000 plus 1% of the first $3,000. How much tax is charged on a income of $12,000? 
economics
income total spending $10,000 $10,000 20,000 18,000 50,000 35,000 100,000 60,000 If a sales tax of ten percent is levied on all purchases, calculate A. amoust of sales tax paid at each income level and B. the fraction f income paid … 
Finance
Your company sponsors a 401(k) plan into which you deposit 12 percent of your $60,000 annual income. Your company matches 50 percent of the first 5 percent of your earnings. You expect the fund to yield 10 percent next year. If you … 
home economics
Suppose you’ll have an annual nominal income of $40,000 for each of the next 3 years, and the inflation rate is 4 percent per year. Find the real value of your $40,000 salary for each of the next 3 years. 
ECONOMICS
Suppose you are a typical person in the U.S. economy. You pay 4 percent of your income in state income tax and 15.3 percent of your labor earnings in federal payroll taxes (employer and employee shares combined). You also pay federal … 
Fundamentals of finance
"Genatron wants to estimate what will happen to its income before interest and taxes if its net sales change from the 2012 level of $1,500,000. Refer to Genatron’s 2012 income statement below, where the income before interest and … 
Fundamentals of finance
"Genatron wants to estimate what will happen to its income before interest and taxes if its net sales change from the 2012 level of $1,500,000. Refer to Genatron’s 2012 income statement below, where the income before interest and … 
Economics
The assessed value of Patty's residential property was $200,000 in 2004. In 2006, the assessed value increased to $225,000. The property tax rate in both years was 1.2 percent. Patty earned $60,000 each year. Determine Patty’s property … 
Math
Amanda Sabino's taxable income is $20,900.00. How much will she pay in state tax? 
Finance
Building an Income Statement Papa Roach Exterminators, Inc., has sales of $586,000, costs of $247,000, depreciation expense of $43,000, interest expense of $32,000, and a tax rate of 35 percent. What is the net income for this firm?