Red White Blue and Orange have taxable income as follows
Red, White, Blue, and Orange have taxable income as follows:
Corporation Taxable Income
Red ............ $ 99,000
White .......... 330,000
Blue ............ 900,000
Orange .......... 40,000,000
a. Calculate the marginal tax rate and the effective tax rate for each of the C corporations.
b. Explain why the marginal tax rate for a C corporation can exceed 35% but the effective tax rate cannot.
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