If Neleh's income increases from $60,000 to $80,000 and her tax liability increases from $12,000 to $16,000, which of the following is true?
A) Her marginal tax rate is 20 percent in this income range.
B) Her average tax rate is 30 percent at her new income level of $80,000.
C) She faces a regressive tax in this income range.
D) She faces a progressive tax in this income range.

Question

Quizplus · Accepted Answer

Her marginal tax rate is calculated as the change in tax liability divided by the change in income, which is ($16,000 - $12,000) / ($80,000 - $60,000) = 20%.

If Neleh's Income Increases from $60,000 to $80,000 and Her