Lonestar Company pays taxes of 25% on their first $25,000 of taxable income and 30% on any taxable income in excess of $25,000.The company's current taxable income is $30,000.What is the marginal tax rate?

Question

Quizplus · Accepted Answer

The marginal tax rate is the tax rate applied to the last dollar of taxable income, which is 30% in this case since the company's taxable income exceeds $25,000. Therefore, the answer is option B. Option A is incorrect as it refers to the tax rate applied to the first $25,000 of taxable income, while option C and D are not applicable to the given information.

Lonestar Company Pays Taxes of 25% on Their First $25,000