Philip purchased one million dollars' worth of New York City bonds. His interest earnings were $100,000 . His total federal tax on this income will be

a. $40,000 . since his marginal tax rate was 40 percent.
b. $40,000 . since only 40 percent of capital gains is taxed.
c. zero.
d. very small, since he had a clever accountant who knew how to use loopholes.


c

Economics

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