Marginal versus Average Tax Rates (Refer to Table 2.3) Corporation Growth has $86,000 in taxable income, and Corporation Income has $8,600,000 in taxable income.
a. What is the tax bill for each firm?
b. Suppose both firms have identified a new project that will increase taxable income by $10,000. How much in additional taxes will each firm pay? Why is this amount the same?