Answer
Amount paid in taxes: ${$13,000}$
Marginal tax rate: 40%
Average tax rate: 26%
Work Step by Step
Since you earn ${$50,000}$, there is no tax on the first ${$10,000}$.
For the second ${$10,000}$, there is a tax of 20%, so you pay ${$2,000}$ in tax on this amount.
For the next ${$10,000}$, there is a tax of 30%, so you pay ${$3,000}$ in tax on this amount.
For the remaining ${$20,000}$, there is a tax of 40%, so you pay ${$8,000}$ in tax on this amount.
In total, you will pay ${$13,000}$ in taxes on your income, for an average tax rate of 26%.
Your marginal tax rate is 40% since any more money earned will fall into the top tax bracket.
This is a progressive tax rate because as you make more money, an increasing percent of income is paid in taxes.
