If your taxable income rises from $27,000 to $47,000,and the taxes you pay rise from $15,000 to $20,000,your marginal tax rate is

Question

Quizplus · Accepted Answer

Marginal tax rate is the rate at which additional dollars of taxable income are taxed. To calculate the marginal tax rate, we need to calculate the change in taxes paid divided by the change in taxable income.

Change in taxes paid= $20,000-$15,000= $5,000 
Change in taxable income= $47,000- $27,000=$20,000

Marginal tax rate= Change in taxes paid/ Change in taxable income 
= $5,000/ $20,000 
= 0.25 or 25%

Therefore, the correct answer is B) 25 percent.

If Your Taxable Income Rises from $27,000 to $47,000,and the Taxes