The tax rate a taxpayer is charged on his or her last dollar earned is called the

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The tax rate a taxpayer is charged on his or her last dollar earned is called the marginal rate. This is because it only applies to the income earned within the highest tax bracket and not to the entire income. The average rate, on the other hand, is the total tax paid divided by the total income earned. Maximum rate and true rate are not commonly used terms in tax terminology.

The Tax Rate a Taxpayer Is Charged on His or Her