The marginal tax rate is equal to the
A) total amount of a person's tax payment divided by the total amount of the person's taxable income.
B) total amount of a person's tax payment divided by the change in the person's taxable income.
C) change in the person's tax payment divided by the total amount of the person's taxable income.
D) change in the person's tax payment divided by the change in the person's taxable income.

Question

Quizplus · Accepted Answer

The marginal tax rate is the tax rate applied to the last dollar of taxable income earned. It is calculated by dividing the change in tax payment by the change in taxable income. Therefore, the correct answer is (D) change in the person's tax payment divided by the change in the person's taxable income.

The Marginal Tax Rate Is Equal to the