If the average tax rate under a progressive tax rate structure is 35 percent, a possible marginal tax rate is:

Question

Quizplus · Accepted Answer

Since the tax rate is progressive, the marginal tax rate (the tax rate on the last dollar earned) will be higher than the average tax rate. Therefore, a possible marginal tax rate could be higher than 35 percent. Option C (42 percent) is the only one that meets this condition, so it is the best choice.

If the Average Tax Rate Under a Progressive Tax Rate