Red, White, Blue, and Magenta have taxable income as follows: Corporation Taxable Amount Blue $ 91,000 White 320,000 Red 800,000 Magenta 50,000,000

Red, White, Blue, and Magenta have taxable income as follows:

Corporation Taxable Amount

Blue $ 91,000

White 320,000

Red 800,000

Magenta 50,000,000

a. Calculate the marginal tax rate and the effective tax rate for each of the C corporations.

b. Explain why the marginal tax rate for a C corporation can exceed 35%, but the effective tax rate cannot.

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