Jurisdiction M imposes an individual income tax based on the following schedule. Which of the following statements is true?

Question

Jurisdiction M imposes an individual income tax based on the following schedule.   Which of the following statements is true?

Quizplus · Accepted Answer

The marginal tax rate is the tax rate applied to each additional dollar of taxable income. Looking at the tax schedule, we can see that the marginal tax rate for taxable income in the range of $38,700 to $82,500 is 8%. Therefore, if Ms.Kaye's taxable income is $63,800, her marginal tax rate is 8%. 
Option A is incorrect because the average tax rate for $227,000 is found by dividing the total tax by the taxable income. The total tax is found by adding up the amount of tax paid for each bracket, which is $2,739 + $6,689 + $10,176 + $12,434 + $16,624 + $22,449 + $28,323 for a total of $99,434. Dividing this by $227,000 gives an average tax rate of approximately 43.8%, not 12%. 
Option B is incorrect because Mr. Poe's taxable income falls under the bracket for taxable income up to $9,875, which has a marginal tax rate of 10%, not 8%. 
Option D is incorrect because option C is correct.

Jurisdiction M Imposes an Individual Income Tax Based on the Following