Suppose taxpayers are required to pay a base tax of $50 plus 30 percent of any income over $100, as in the initial tax system B in Table 16.1. Suppose further that the taxing authority wishes to raise by $40 the taxes of people withincomes of $200.

(a) If marginal tax rates are to remain unchanged, what will the new base tax have to be? 

(b) If the base tax of $50 is to remain unchanged, what will the marginal tax rate have to be?