If you were to face a marginal tax rate of 20 percent, how much would your tax bill increase when your income increased from $50,000 to $52,000?

Question

Quizplus · Accepted Answer

The marginal tax rate of 20% means that for every additional dollar earned above $50,000, 20 cents will be taken as tax. Therefore, the increase in income from $50,000 to $52,000 is $2,000.

20% of $2,000 = $400

So, the tax bill will increase by $400.

If You Were to Face a Marginal Tax Rate of 20