Blue,Inc,has Taxable Income Before Salary Payments to Its President of $700,000

Essay

Blue,Inc.,has taxable income before salary payments to its president of $700,000 in 2008.Blue is in the 34% tax bracket,and the president is in the 35% tax bracket.
a.Calculate the tax liability to Blue if the president's salary is $400,000 and if it is $100,000.
b.What tax benefit is there of paying the larger salary to the president?
c.What negative tax result may occur associated with the payment of the higher salary?