Noise Sniffers Inc. (NSI) is a contractor to public utilities providing electrical service to homes and businesses. Most small- and midsized municipal utilities do not have the expertise or the equipment to go out and ‘‘sniff’’ noise caused by foreign objects on power lines, poor grounding on poles, cracked or carbonized lightning arrestors, and so on. Success means reduction in energy loss to the utility and reduction in static to those using radios nearby. Early on, ham radio operator K5KC suggested NSI personnel get training from the American Radio Relay League and purchase the right detection equipment. NSI now travels throughout the state to help utilities in need. Taxable income last year was only about \($30,000\) for this sporadic part-time work. This year, NSI is adding a larger adjoining state as a customer and will enjoy an increase of about \($40,000\) in taxable income.

a. Determine the effective (average) tax rate on all of last year’s taxable income.

b. Determine the effective (average) tax rate on all of this year’s taxable income.

c. Determine the incremental tax rate.

d. Determine the marginal tax rate this year.