Question

Jurisdiction X levies a flat 14 percent tax on individual income in excess of $35,000 per year. Individuals who earn$35,000 or less pay no income tax.

Mr. Hill earned $98,750 income this year. Compute his income tax and determine his average and marginal tax rate.

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In this exercise, we are asked to determine the income tax, average tax rate, and marginal tax rate. But before we proceed, let us first understand the definitions of taxes.

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