A person's marginal tax rate equals

Question

Quizplus · Accepted Answer

A person's marginal tax rate is the rate at which their last dollar of income is taxed. It is calculated by finding the increase in taxes they would pay as a percentage of the rise in their income. Option A is incorrect because the average tax rate is the total tax paid divided by total income, not the tax obligation. Option C is incorrect because it calculates the effective tax rate, which is the tax obligation divided by income. Option D is incorrect because it assumes a specific scenario of an increased average tax rate, which may not always apply.

A Person's Marginal Tax Rate Equals