QuizA 6 2 Modeling Tax Schedules 8 Examine the tax schedule for the years 1914 and 2018 after a new tax law went into effect The

Question

QuizA 6 2 Modeling Tax Schedules 8 Examine the tax schedule for the years 1914 and 2018 after a new tax law went into effect The schedule in 1914 applied to all taxpayers The schedule for 2018 is for a single taxpayer Marginal Tax Rate is the rate of tax a taxpayer pays at his her income level Marginal Tax Rate 1 0 2 0 3 0 4 0 5 0 6 0 7 0 1914 Over Tax Brackets 0 20 000 50 000 75 000 100 000 250 000 500 000 But not over 20 000 50 000 75 000 100 000 250 000 500 000 Marginal Tax Rate 10 0 12 0 22 0 24 0 32 0 35 0 37 0 2018 Over Tax Brackets 0 9 525 38 700 82 500 157 500 200 000 500 000 But not over 9 525 38 700 82 500 157 500 200 000 500 000 a What was the marginal tax rate for a taxpayer with a taxable income of 40 000 in 1914 b What was the marginal tax rate for a taxpayer with a taxable income of 40 000 in 2018 c Based on the marginal tax rate find the difference in tax between a single taxpayer in 1914 making 90 000 and a single taxpayer in 2018 making the same amount

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