If a family earned an additional $6,000 and, as a consequence, sustained a reduction of $3,600 in government benefits, the implicit marginal tax rate for this family would be

Question

Quizplus · Accepted Answer

The implicit marginal tax rate is calculated by dividing the reduction in benefits by the additional income earned. Here, $3,600 reduction in benefits divided by $6,000 additional income equals 0.6, or 60 percent.

If a Family Earned an Additional $6,000 And, as a Consequence