Tax tables are based on ________ tax rates.
A)marginal
B)average
C)implied
D)investment

Question

Quizplus · Accepted Answer

Tax tables are based on marginal tax rates, which refer to the tax rate that applies to the last dollar of a person's taxable income. This is the rate at which additional income is taxed, and it is applied progressively as income increases. Average tax rates, on the other hand, refer to the total tax paid divided by total income, and are not used in constructing tax tables. Implied tax rates and investment tax rates are also not used in constructing tax tables.

Tax Tables Are Based on ________ Tax Rates