Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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7.8.25 d)

use table 7.13 

the effective tax rate for an income was calculated by doing 15856/80000 which equaled 19.82%.

compute the effective tax rate a second time, as a weighted average of the rates in the various brackets, using as weights the amount of income subject to tax at each rate. you should get the same answer.

 

**Table 7.13. 2014 Single Taxpayer Tax Calculation [R180]**

This table outlines the federal income tax structure for single taxpayers for the year 2014. The table is divided into two main columns: Taxable Income and Tax, providing a step-by-step breakdown of tax obligations.

**Taxable Income:**

- **More than $0** but **less than $9,075**:  
  Tax is 10% of taxable income.

- **More than $9,075** but **less than $36,900**:  
  Tax is $908 plus 15% of the excess over $9,075.

- **More than $36,900** but **less than $89,350**:  
  Tax is $5,081 plus 25% of the excess over $36,900.

- **More than $89,350** but **less than $186,350**:  
  Tax is $18,194 plus 28% of the excess over $89,350.

- **More than $186,350** but **less than $405,100**:  
  Tax is $45,354 plus 33% of the excess over $186,350.

- **More than $405,100** but **less than $406,750**:  
  Tax is $117,541 plus 35% of the excess over $405,100.

- **More than $406,750**:  
  Tax is $118,189 plus 39.6% of the excess over $406,750.

This table provides a clear understanding of how taxes were calculated for single taxpayers in 2014, considering different income levels and corresponding tax rates.
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Transcribed Image Text:**Table 7.13. 2014 Single Taxpayer Tax Calculation [R180]** This table outlines the federal income tax structure for single taxpayers for the year 2014. The table is divided into two main columns: Taxable Income and Tax, providing a step-by-step breakdown of tax obligations. **Taxable Income:** - **More than $0** but **less than $9,075**: Tax is 10% of taxable income. - **More than $9,075** but **less than $36,900**: Tax is $908 plus 15% of the excess over $9,075. - **More than $36,900** but **less than $89,350**: Tax is $5,081 plus 25% of the excess over $36,900. - **More than $89,350** but **less than $186,350**: Tax is $18,194 plus 28% of the excess over $89,350. - **More than $186,350** but **less than $405,100**: Tax is $45,354 plus 33% of the excess over $186,350. - **More than $405,100** but **less than $406,750**: Tax is $117,541 plus 35% of the excess over $405,100. - **More than $406,750**: Tax is $118,189 plus 39.6% of the excess over $406,750. This table provides a clear understanding of how taxes were calculated for single taxpayers in 2014, considering different income levels and corresponding tax rates.
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