Suppose a taxpayer has an income of $90,000 and a taxable income of $75,000,and pays $7,500 in taxes.If the taxpayer says he is taxed at a 10 percent tax rate,he is referring to the

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Quizplus · Accepted Answer

The taxpayer is referring to the nominal tax rate, as he is simply dividing the taxes paid ($7,500) by his taxable income ($75,000) to get 0.10, or 10%. The nominal tax rate is the percentage at which income is taxed before any deductions or adjustments are made.

Suppose a Taxpayer Has an Income of $90,000 and a Taxable