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17 March, 17:58

Kathy works full time during the day as an economist and faces an 80 percent marginal tax rate. If Kathy were to get an offer to work a second job in the evenings doing consulting work for a local business for $10,000 per year, how much of this additional income would she be able to keep as net pay after taxes? a. $10,000 b. $6,000 c. $2,000 d. $4,000

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  1. 17 March, 18:12
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    c. $2,000

    Explanation:

    Kathy is subjected to a 80 percent marginal rate, which means that 80 percent of her income is taxed. We can find what she would keep as net pay after taxes with this simple formula:

    $10,000 x 80% = $2,000
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