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Question 7.T-Y-S.B: If the incremental federal income tax rate is 34% and the in...

If the incremental federal income tax rate is 34 \% and the incremental state income tax rate is 6 \%, what is the effective combined income tax rate (t) ? If state income taxes are 12 \% of taxable income, what now is the value of t ? (7.7)

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\begin{aligned} t &=0.06+0.34(1-0.06)=0.3796, \text { or } 37.96 \% \\ t &=0.12+0.34(1-0.12)=0.4192, \text { or } 41.92 \% \end{aligned}

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