$$\begin{array}{l}
\begin{array} { c c }
\text { Taxable Income} &\text { Taxes Paid }\
\$ 10,000 & 0 \
20,000 & 1,000 \
30,000 & 2,000 \
40,000 & 4,000 \
50,000 & 8,000
\end{array}
\end{array}$$
-If your taxable income increases from $30,000 to $40,000,your marginal tax rate is

Question

$$\begin{array}{l}
\begin{array} { c c } 
\text { Taxable Income} &\text { Taxes Paid }\
\$ 10,000 & 0 \
20,000 & 1,000 \
30,000 & 2,000 \
40,000 & 4,000 \
50,000 & 8,000
\end{array}
\end{array}$$
-If your taxable income increases from $30,000 to $40,000,your marginal tax rate is

Quizplus · Accepted Answer

The marginal tax rate is calculated as the change in taxes paid divided by the change in taxable income. Here, the taxes increase from $2,000 to $4,000 as income increases from $30,000 to $40,000. The marginal tax rate is $(4,000 - 2,000) / (40,000 - 30,000) = 2,000 / 10,000 = 0.20$ or 20 percent.

-If Your Taxable Income Increases from $30,000 to $40,000,your Marginal