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A Marginal Tax Rate of 91 Percent Means That

Question 114

Multiple Choice

A marginal tax rate of 91 percent means that


A) total tax is calculated by taking 91 percent of income.
B) total tax is calculated by taking 9 percent of income.
C) for each additional dollar earned,only 91 cents can be used toward consumption.
D) for each additional dollar earned,only 9 cents can be used toward consumption.
E) for each additional dollar earned,9 cents is taxed away.

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