The percentage of an additional dollar of income that is paid in tax is the

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The percentage of an additional dollar of income that is paid in tax is known as the marginal tax rate, which is the amount of tax paid on the last dollar earned. This is a key concept in understanding how tax rates affect individual behavior and can influence decisions related to work and investment. Option A, personal income tax, refers to the tax system overall, not the specific rate paid on an additional dollar of income. Option B, sales tax, is a type of consumption tax that is not tied to income. Option D, capital tax, refers to taxes on assets such as property and investments, which are different from income taxes. Option E, regressive tax, refers to a tax system where the rate decreases as income rises, which is the opposite of a progressive tax system.

The Percentage of an Additional Dollar of Income That Is