Problem
Consider a divorced individual who earns $26,000, has two children, pays $4800 in child care expenses, $2000 in mortgage interest payments, and $4500 in medical expenses. Medical expenses in excess of 7.5 percent of one's income are deductible. When the individual's income is $26,000 she gets a 22 percent child care expense credit: when her income is $28,001 her credit is only 20 percent. Her base marginal tax rate is 15 percent. What is their actual marginal tax rate?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.