If your income increases from $10,000 per year to $14,000 per year and your tax payment increases from $2,000 to $2,840, the marginal tax rate

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Quizplus · Accepted Answer

The marginal tax rate is calculated by the increase in tax divided by the increase in income. Here, the increase in tax is $840 ($2,840 - $2,000), and the increase in income is $4,000 ($14,000 - $10,000). So, the marginal tax rate is $840 / $4,000 = 0.21, or 21%.

If Your Income Increases from $10,000 Per Year to $14,000