It is only if a taxpayer has a very low income that his average tax rate will equal his marginal tax rate.

Question

Quizplus · Accepted Answer

The average tax rate is the total tax paid divided by the total income. The marginal tax rate is the tax rate on the last dollar of income earned. If a taxpayer has a very low income, then the average tax rate will be low because the total tax paid will be low. The marginal tax rate will also be low because the tax rate on the last dollar of income earned will be low. Therefore, the average tax rate will equal the marginal tax rate.

It Is Only If a Taxpayer Has a Very Low