The Design of the Tax System 3051
Table 12-4
Income
Tax rate
$0 to $40,000
25%
$40,000 to $100,000
40%
Over $100,000
60%
142. Refer to Table 12-4. What is the marginal tax rate for a person who makes $35,000?
a. 25%
b. 30%
c. 40%
d. 60%
143. Refer to Table 12-4. What is the marginal tax rate for a person who makes $50,000?
a. 25%
b. 28%
c. 40%
d. 60%
3052 The Design of the Tax System
144. Refer to Table 12-4. What is the marginal tax rate for a person who makes $130,000?
a. 30%
b. 40%
c. 50%
d. 60%
145. Refer to Table 12-4. What is the average tax rate for a person who makes $130,000?
a. 30%
b. 40%
c. 50%
d. 60%
The Design of the Tax System 3053
Table 12-5
Income
Tax rate
$0 to $50,000
20%
$50,001 to $100,000
40%
Over $100,000
60%
146. Refer to Table 12-5. What is the marginal tax rate for a person who makes $37,000?
a. 9.25%
b. 20%
c. 25%
d. 40%
147. Refer to Table 12-5. What is the marginal tax rate for a person who makes $60,000?
a. 20%
b. 23%
c. 40%
d. 45%
3054 The Design of the Tax System
148. Refer to Table 12-5. What is the marginal tax rate for a person who makes $120,000?
a. 25%
b. 35%
c. 45%
d. 60%
149. Refer to Table 12-5. What is the average tax rate for a person who makes $120,000?
a. 25%
b. 35%
c. 45%
d. 60%
The Design of the Tax System 3055
Table 12-6
The table below shows the marginal tax rates for an unmarried taxpayer for various levels of
taxable income.
150. Refer to Table 12-6. For this tax schedule, what is the marginal tax rate for an individual with
taxable income of $49,000?
a. 0%
b. 10%
c. 25%
d. 35%
151. Refer to Table 12-6. For this tax schedule, what is the marginal tax rate for an individual with
$212,000 in taxable income?
a. 0%
b. 1%
c. 2%
d. 45%
On Taxable Income…
The Tax Rate is...
$0 to $10,000
10%
$10,000 to $30,000
25%
$30,000 to $60,000
35%
$60,000 to $110,000
40%
$110,000 to $180,000
43%
Over $180,000
45%
3056 The Design of the Tax System
152. Refer to Table 12-6. For this tax schedule, what is the average tax rate for an individual with
$49,000 in taxable income?
a. 25.8%
b. 27.5%.
c. 40.0%
d. 43.7%
153. Refer to Table 12-6. For this tax schedule, what is the average tax rate for an individual with
$280,000 in taxable income?
a. 39.9%
b. 40.2%
c. 42.7%
d. 44.8%
154. Refer to Table 12-6. For this tax schedule, what is the total income tax due for an individual
with $49,000 in taxable income?
a. $12,650 b. $14,370 c. $15,960 d. $16,220
The Design of the Tax System 3057
155. Refer to Table 12-6. For this tax schedule, what is the total tax liability for an individual with
$280,000 in taxable income?
a. $105,700
b. $108,900
c. $111,600
d. $117,300
Table 12-7
The following table shows the marginal tax rates for unmarried individuals for two years.
2009
2010
On Taxable Income…
The Tax Rate is…
On Taxable Income…
The Tax Rate is…
$0 to $15,000
10%
Over $0
20%
$15,000 to $40,000
15%
$40,000 to $75,000
20%
$75,000 to $120,000
25%
Over $120,000
30%
156. Refer to Table 12-7. For an individual who earned $80,000 in both years, which of the
following statements is true
regarding the individual’s marginal tax rate?
a. The marginal tax rate is higher in 2010 than in 2009.
b. The marginal tax rate is the same in 2010 as it was in 2009.
c. The marginal tax rate is lower in 2010 than in 2009.
d. With a proportional tax, as in 2010, it is not possible to determine the individual’s marginal tax
rate so it is not possible to compare the marginal tax rates in the two years.
3058 The Design of the Tax System
157. Refer to Table 12-7. For an individual who earned $80,000 of taxable income in 2009, what
was the individual’s average tax rate in 2009?
a. 12.7%
b. 15.0%
c. 16.1%
d. 16.9%
158. Refer to Table 12-7. For an individual who earned $35,000 in taxable income in both years,
which of the following
describes the change in the individual’s marginal tax rate between the two years?
a. The marginal tax rate increased from 2009 to 2010.
b. The marginal tax rate decreased from 2009 to 2010.
c. The marginal tax rate remained constant from 2009 to 2010.
d. The change in the marginal tax rate cannot be determined for the two tax schedules shown.
The Design of the Tax System 3059
159. Refer to Table 12-7. For an individual who earned $35,000 in taxable income in both years,
which of the following
describes the change in the individual’s average tax rate between the two years?
a. The average tax rate increased from 2009 to 2010.
b. The average tax rate decreased from 2009 to 2010.
c. The average tax rate remained constant from 2009 to 2010.
d. The change in the average tax rate cannot be determined for the two tax schedules shown.
Table 12-8
The following table presents the total tax liability for an unmarried taxpayer under four different
tax schedules for the income levels shown.
Amount of Tax Due
Income
Tax Schedule A
Tax Schedule B
Tax Schedule C
Tax Schedule D
$50,000
$10,000
$20,000
$17,500
$15,000
$100,000
$30,000
$30,000
$25,000
$30,000
$200,000
$80,000
$40,000
$30,000
$60,000
160. Refer to Table 12–8. For an individual with $200,000 in taxable income, which tax schedule
has the lowest
average marginal tax rate?
a. Tax Schedule A
b. Tax Schedule B
c. Tax Schedule C
d. Tax Schedule D
3060 The Design of the Tax System
161. Refer to Table 12-8. For an individual with $200,000 in taxable income, which tax schedule has
the highest average tax rate?
a. Tax Schedule A
b. Tax Schedule B
c. Tax Schedule C
d. Tax Schedule D
Table 12-9
United States Income Tax Rates for a Single Individual, 2012 and 2013.
2012 Tax Rates
Income Ranges
2013 Tax Rates
Income Ranges
15%
$0 – $28,000
10%
$0 – $10,000
28%
$28,000 – $70,000
15%
$10,000 – $30,000
31%
$70,000 – $140,000
27%
$30,000 – $60,000
36%
$140,000 – $300,000
30%
$60,000 – $150,000
40%
over $300,000
35%
$150,000 – $320,000
38%
over $320,000
162. Refer to Table 12-9. Bill is a single person whose taxable income is $35,000 a year. What is
his average tax rate in 2012?
a. 17.6%
b. 20.5%
c. 21.3%
d. 26.2%
The Design of the Tax System 3061
163. Refer to Table 12-9. Bill is a single person whose taxable income is $35,000 a year. What is
his average tax rate in 2013?
a. 15.3%
b. 17.6%
c. 21.3%
d. 24.8%
164. Refer to Table 12-9. Bill is a single person whose taxable income is $35,000 a year. What
happened to his average tax rate between 2012 and 2013?
a. It increased.
b. It decreased.
c. It did not change.
d. We do not have enough information to answer this question.
3062 The Design of the Tax System
165. Refer to Table 12–9. Jake is a single person whose taxable income is $20,000 a year. What is
his average tax rate in 2012?
a. 10%
b. 12.5%
c. 15%
d. 28%
166. Refer to Table 12–9. Jake is a single person whose taxable income is $20,000 a year. What is
his average tax rate in 2013?
a. 10%
b. 12.5%
c. 15%
d. 28%
The Design of the Tax System 3063
167. Refer to Table 12-9. Jake is a single person whose taxable income is $20,000 a year. What
happened to his average tax rate between 2012 and 2013?
a. It increased.
b. It decreased.
c. It did not change.
d. We do not have enough information to answer this question.
168. Refer to Table 12-9. Darby is a single person whose taxable income is $320,000 a year. What
happened to her average tax rate between 2012 and 2013?
a. It increased.
b. It decreased.
c. It did not change.
d. We do not have enough information to answer this question.
3064 The Design of the Tax System
169. Refer to Table 12-9. Samantha is a single person whose taxable income is $100,000 a year.
What is her average tax rate in 2012?
a. 22.3%
b. 25.3%
c. 27.8%
d. 28.4%
170. Refer to Table 12-9. Samantha is a single person whose taxable income is $100,000 a year.
What is her average tax rate in 2013?
a. 24.1%
b. 26.4%
c. 27.8%
d. 30.9%
The Design of the Tax System 3065
171. Refer to Table 12-9. Samantha is a single person whose taxable income is $100,000 a year.
What happened to her average tax rate between 2012 and 2013?
a. It increased.
b. It decreased.
c. It did not change.
d. We do not have enough information to answer this question.
172.
Refer to Table 12-9. Harry is a single person whose taxable income is $35,000 a year. What is
his marginal tax rate in 2012?
a. 15%
b. 28%
c. 31%
d. 36%
3066 The Design of the Tax System
173. Refer to Table 12-9. Harry is a single person whose taxable income is $35,000 a year. What is
his marginal tax rate in 2013?
a. 10%
b. 15%
c. 27%
d. 30%
174. Refer to Table 12-9. Harry is a single person whose taxable income is $35,000 a year. What
happened to his marginal tax rate between 2012 and 2013?
a. It increased.
b. It decreased.
c. It did not change.
d. We do not have enough information to answer this question.
The Design of the Tax System 3067
175. Refer to Table 12-9. Ruby Sue is a single person whose taxable income is $100,000 a year.
What is her marginal tax rate in 2012?
a. 15%
b. 28%
c. 31%
d. 36%
176. Refer to Table 12-9. Ruby Sue is a single person whose taxable income is $100,000 a year.
What is her marginal tax rate in 2013?
a. 15%
b. 27%
c. 30%
d. 35%
3068 The Design of the Tax System
177. Refer to Table 12-9. Ruby Sue is a single person whose taxable income is $100,000 a year.
What happened to her marginal tax rate between 2012 and 2013?
a. It increased.
b. It decreased.
c. It did not change.
d. We do not have enough information to answer this question.
Table 12–10
On Taxable Income …
The Tax Rate is …
Up to $8,375
10%
From $8,375 to $34,000
15
From $34,000 to $82,400
25
From $82,400 to $171,850
28
From $171,850 to $373,650
33
Over $373,650
35
178. Refer to Table 12-10. If Miss Kay has $80,000 in taxable income, her tax liability is
a. $11,581.
b. $16,181.
c. $20,000.
d. $24,881.
The Design of the Tax System 3069
179. Refer to Table 12-10. If Miss Kay has $80,000 in taxable income, her average tax rate is
a. 18.5%.
b. 20.2%.
c. 21.8%.
d. 25.0%.
180. Refer to Table 12-10. If Miss Kay has $80,000 in taxable income, her marginal tax rate is
a. 15%.
b. 25%.
c. 28%.
d. 33%.
3070 The Design of the Tax System
181. Refer to Table 12-10. If Willie has $170,000 in taxable income, his tax liability will be
a. $16,781.
b. $41,309.
c. $41,827.
d. $47,600.
182. Refer to Table 12-10. If Willie has $170,000 in taxable income, his average tax rate is
a. 23.8%.
b. 24.3%.
c. 25.9%.
d. 28.0%.