Adam and Eve submit a married-filing-jointly return to the IRS. During the year their two jobs provided them with a combined income of $123,000. They had their second child during the year, and they plan to use the standard deduction of $9500 applicable for the year. Dividends and interest amounted to $3210, and an investment in a stock mutual fund had capital gains of $3500. Personal exemptions are $4000 currently.
(a) Compute their exact federal tax liability.
(b) Compute their average tax rate.
(c) What percent of gross income is consumed by federal taxes?