Corporation Growth has $82,500 in taxable income, and Corporation Income has $8,250,000 in taxable income.

Table 2.3

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?

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Taxable Income Tax Rate 0 50,000 50,00175,000 75,00100,000 00,00335,000 335,001-10,000,000 10,000,001-15,000,000 15,000,001-18,333,333 15% 25 34 39 34 35 38 35 8,333,334+