Which one of the following statements related to taxes is correct?
A)The marginal tax rate must be equal to or lower than the average tax rate for a firm.
B)The tax for a firm is computed by multiplying the firm's current marginal tax rate times the taxable income.
C)Additional income is taxed at a firm's average tax rate.
D)Given the corporate tax structure in 2012, the highest marginal tax rate is equal to the highest average tax rate.
E)The marginal tax rate for a firm can be either higher than or the same as the average tax rate.

Question

Quizplus · Accepted Answer

The marginal tax rate for a firm can be either higher than or the same as the average tax rate. Option A is incorrect because the marginal tax rate can be higher than the average tax rate. Option B is incorrect because the tax for a firm is computed by multiplying taxable income by the average tax rate. Option C is incorrect because additional income is taxed at the marginal tax rate, not the average tax rate. Option D is incorrect because the highest marginal tax rate is higher than the highest average tax rate.

Which One of the Following Statements Related to Taxes Is