Question

suppose tom earns $35,000 annually. his government uses a table (tax brackets) similar to the table used by the irs in the usa to calculate taxes owed. the table lists tax rates for all income ranges. this years table is as follows: income range tax rate $0 - $5,000 0% $5,001 - $20,000 10% $20,001 - $40,000 20% $40,001 - $60,000 40% $60,001 and up 60% use at least 3 decimal points in your answers and all intermediate calculations. given this information: 1. toms marginal tax rate is select %. 2. the amount tom owes in select 3. toms average tax rate is select %.

Explanation:

Step1: Determine marginal tax rate

Tom's income is $35,000, which falls in the $20,001 - $40,000 range with a 20% tax rate. So his marginal tax rate is 20%.

Step2: Calculate tax amount

Tax on first $5,000: $5000\times0\% = 0$
Tax on income from $5,001 - $20,000: $(20000 - 5000)\times10\%=15000\times0.1 = 1500$
Tax on income from $20,001 - $35,000: $(35000 - 20000)\times20\%=15000\times0.2 = 3000$
Total tax owed $=0 + 1500+3000=4500$

Step3: Calculate average tax rate

Average tax rate $=\frac{4500}{35000}\times100\%\approx12.857\%$

Answer:

1. 20
2. 4500
3. 12.857