The fraction of an additional dollar that is paid in taxes is called which of the following?
A)the average tax rate
B)the marginal tax rate
C)the capital gains tax
D)the taxable gains tax

Question

Quizplus · Accepted Answer

The fraction of an additional dollar that is paid in taxes is called the marginal tax rate. This refers to the tax rate applied to the last dollar of taxable income earned. The average tax rate, on the other hand, is the total amount of tax paid divided by total taxable income. The capital gains tax and taxable gains tax are specific types of taxes that may apply to certain types of income or transactions.

The Fraction of an Additional Dollar That Is Paid in Taxes