Calculate the marginal tax rate and effective tax rate

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Reference no: EM13155351

Red, Green, Blue, and Purple have taxable income as follows:

Corporation Taxable Income

Red $98,000

Green 295,000

Blue 800,000

Purple 50,000,000

a. Calculate the marginal tax rate and the effective tax rate for each of the C corporations.

b. Explain why the marginal tax rate for a C corporation can exceed 35%, but the effective tax rate cannot do so.

Reference no: EM13155351

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