Suppose montana establishes an income tax schedule

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Suppose Montana establishes an income tax schedule that has a tax rate of 5% on the ?rst $20,000 of income, 10% on the next $10,000, and then 20% on all taxable income above $30,000. Montana provides a $2,000 exemption (deduction) per family member. (Let's call this tax system A.)

(a) The Abrams family has three members. Thomas is the sole earner, and he has two kids. The family's annual income is $35,000. Calculate their: (i) Marginal tax rate; (ii) Taxable income; (iii) Total taxes; (iv) Average tax rate.

Reference no: EM132413369

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