Table 12-8

-Refer to Table 12-8.If the government imposes a $3,000 lump-sum tax,the marginal tax rate for Charles would be
A) 0 percent.
B) 5 percent.
C) 6.7 percent.
D) 10 percent.

Question

Table 12-8
 
-Refer to Table 12-8.If the government imposes a $3,000 lump-sum tax,the marginal tax rate for Charles would be
A) 0 percent. 
B) 5 percent. 
C) 6.7 percent. 
D) 10 percent.

Quizplus · Accepted Answer

A lump-sum tax is a fixed amount that does not change with the level of income, so the marginal tax rate, which is the rate on the next dollar of income, remains 0 percent.

Table 12-8 -Refer to Table 12-8.If the Government Imposes a $3,000 Lump-Sum