Your ________ tax rate is the percentage of the next taxable dollar of income you earn that is payable as a tax.

Question

Quizplus · Accepted Answer

Marginal tax rate is the percentage of the next dollar of income that you earn that is payable as tax. This rate is crucial when making financial decisions as it helps to determine the after-tax return on an investment or the net earnings from a new job. Deductible tax rate refers to the amount of expenses that can be subtracted from taxable income, residual is what remains after all expenses or liabilities have been taken into account, average tax rate is the total amount of tax paid divided by taxable income, and total tax rate is the sum of all taxes paid. Therefore, the best choice is C) marginal.

Your ________ Tax Rate Is the Percentage of the Next