Patricia has taxable income of $40,000 on which she pays income tax of $4,745.If Patricia's taxable income increases by $2,000, she will pay an additional tax of $440.What is Patricia's marginal tax rate?

Question

Quizplus · Accepted Answer

The marginal tax rate is calculated by dividing the additional tax paid by the additional income. Here, $440 additional tax on $2,000 additional income results in a marginal tax rate of 22% ($440 / $2,000 = 0.22 or 22%).

Patricia Has Taxable Income of $40,000 on Which She Pays