Suppose the income tax rate is 0 percent on the first $10,000; 10 percent on the next $20,000; 20 percent on the next $20,000; 30 percent on the next $20,000; and 40 percent on all income above $70,000. Family A has income of $100,000 while Family B has income of $40,000. The marginal tax rates faced by the two families are
A) 40 percent on A and 10 percent on B.
B) 40 percent on A and 20 percent on B.
C) 30 percent on A and 20 percent on B.
D) 30 percent on A and 30 percent on B.
Answer: B
Economics
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