The following data represent a personal income tax schedule.Answer the question on the basis of this information. $$\begin{array} { c c }
\text { Taxable Income } & \text { Total Tax } \
\hline
\$ 0 & \$ 0 \
2,000 & 200 \
4,000 & 600 \
6,000 & 1,200 \
8,000 & 2,000 \
10,000 & 3,000
\end{array}$$ Refer to the table.If your taxable income is $8,000,your average tax rate is:

Question

The following data represent a personal income tax schedule.Answer the question on the basis of this information. $$\begin{array} { c c } 
\text { Taxable Income } & \text { Total Tax } \
\hline
\$ 0 & \$ 0 \
2,000 & 200 \
4,000 & 600 \
6,000 & 1,200 \
8,000 & 2,000 \
10,000 & 3,000
\end{array}$$ Refer to the table.If your taxable income is $8,000,your average tax rate is:

Quizplus · Accepted Answer

The average tax rate for an income of $8,000 is calculated by dividing the total tax ($2,000) by the taxable income ($8,000), which equals 25 percent. The marginal tax rate on additional income is determined by the increase in tax from an income of $8,000 to $10,000, which is $1,000 ($3,000 - $2,000) on an increase of $2,000 in income, resulting in a 50 percent marginal rate (not 40 percent as stated in the choice). However, given the options provided, the closest correct interpretation based on the structure of the question and the options available would be to understand the marginal rate as the rate applied to the next dollar earned beyond the $8,000, which is not directly calculable from the given data. Therefore, the explanation provided does not perfectly align with the choices given, indicating a potential error in the interpretation of the options.

The Following Data Represent a Personal Income Tax Schedule Refer to the Table