Problem
Chuck, a single taxpayer, earns $77,600 in taxable income and $12,900 in interest from an investment in City of Heflin bonds. (Use the U.S. tax rate schedule.)
Task
i. If Chuck earns an additional $40,000 of taxable income, what is his marginal tax rate on this income?
ii. What is his marginal rate if, instead, he had $40,000 of additional deductions?