Assume That Peter Is a Single Parent Who Is in Poverty

Multiple Choice

Assume that Peter is a single parent who is in poverty. He receives food stamps and Medicaid. For every $100 that he earns, Peter loses $35 of his food stamp benefits and $20 in his Medicaid benefits. Also, Peter's income is taxed at a rate of 10 percent. Then, Peter's effective marginal tax rate is

A) 45 percent.
B) 55 percent.
C) 65 percent.
D) 70 percent.