Redneck Farm Equipment owes 48329 in tax on a taxable income

Redneck Farm Equipment owes $48,329 in tax on a taxable income of $549,600. The company has determined that it will owe $56,211 in tax if its taxable income rises to $565,000. What is the marginal tax rate at this level of income?

Solution

Marginal income:

= $565,000-$549,600

= $15,400

Marginal tax:

= $56,211-$48,329

= $7,882

Marginal tax rate:

= $7,882÷$15,400

= 51.18%