Tax revenues can be found by
A) multiplying the tax base by the (average)tax rate.
B) dividing the tax base by the (average)tax rate.
C) summing the tax base and the (average)tax rate.
D) multiplying taxable income by the marginal tax rate.

Question

Quizplus · Accepted Answer

Tax revenues are calculated by multiplying the tax base (the amount of income, property, goods, or services subject to taxation) by the tax rate. This gives the total amount of revenue that will be collected from the tax. The average tax rate is used if there are different tax rates for different income levels or types of goods/services being taxed. Therefore, choice A is the best answer.

Tax Revenues Can Be Found by