Which tax rate determines whether it is worth it to work an extra day?
A) marginal
B) average
C) payroll (FICA)
D) capital gains

Question

Quizplus · Accepted Answer

The marginal tax rate is the percentage of tax an individual pays on the next dollar earned. It is the rate that determines whether it's financially worthwhile to work an extra day or take on an extra shift or job. If the marginal tax rate is too high, the additional income earned may not be worth the effort, as a significant portion of it would be taxed at that higher rate.

Which Tax Rate Determines Whether It Is Worth It to Work