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 rate at which the last dollar of income is taxed. From the schedule, we can see that for taxable income between $41,202 and $85,000, the marginal tax rate is 8%. Therefore, option B is incorrect because Mr. Poe's taxable income falls in this bracket, and his marginal tax rate is 8%. Option A is incorrect because if Mrs. Hall's taxable income is $227,000, her marginal tax rate is 8% on the income from $85,001 to $227,000 and 6% on the income from $40,000 to $85,000, giving an average tax rate of less than 12%. Option C is correct because if Ms. Kaye's taxable income is $63,800, her marginal tax rate is 8% on the income from $41,202 to $63,800.

Jurisdiction M Imposes an Individual Income Tax Based on the Following