Calculate an individuals marginal after-tax income

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Reference no: EM131891452

In order to raise revenues during the recent recession, the governor of your state proposed the following taxation formula:

T (i)= 0.001i^0.5, where is represents the total annual income earned by an individual in dollars and T (i) is the income tax rate as a percentage of total annual income.

a. calculate the after-tax (net) income N (i) an individual can expect to earn as a function of income (i)

b. calculate an individual's marginal after-tax income at income levels of $100,000 and $500,000.

c. At what income does an individual's marginal after-tax income become negative? What is the after-tax income at that level, and what happens at higher income levels?

d. What do we suspect is the most anyone can earn after taxes?

Reference no: EM131891452

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