Scenario 12-3
A taxpayer faces the following tax rates on her income:

20 percent of the first $\$ 40,000$ of her income;
30 percent of all her income above $\$ 40,000$.
-Refer to Scenario 12-3. The taxpayer faces a marginal tax rate of

Question

Scenario 12-3
A taxpayer faces the following tax rates on her income:
​
 20 percent of the first $\$ 40,000$ of her income;
30 percent of all her income above $\$ 40,000$.
-Refer to Scenario 12-3. The taxpayer faces a marginal tax rate of

Quizplus · Accepted Answer

The marginal tax rate is the rate at which the last dollar of income is taxed. When the taxpayer's income rises from $20,000 to $20,001, she is still within the first $40,000 of income, which is taxed at a 20 percent rate.

Scenario 12-3 a Taxpayer Faces the Following Tax Rates on Her

Scenario 12-3
a Taxpayer Faces the Following Tax Rates on Her