If personal income up to and including $25,000 is not taxed,income of $25,001 to $50,000 is taxed at 10%,and income over $50,000 is taxed at 20%,then a family earning an income of $75,000 will pay a marginal tax rate of _____%.
A)5
B)7.5
C)10
D)20

Question

Quizplus · Accepted Answer

The marginal tax rate is the tax rate applied to the last dollar earned. In this case, the family’s income of $75,000 is above $50,000, so the last dollar earned is taxed at 20%. Therefore, the family’s marginal tax rate is 20%.

If Personal Income Up to and Including $25,000 Is Not