The relationship of a corporation's average income tax rate to its marginal income tax rate is that the average rate is

Question

Quizplus · Accepted Answer

The average income tax rate is calculated by dividing the total income tax paid by the corporation by its taxable income. This rate is usually lower than the marginal income tax rate, which is the rate applied to the last dollar of taxable income earned. Therefore, the correct answer is B, which states that the average rate is less than or equal to its marginal rate.

The Relationship of a Corporation's Average Income Tax Rate to Its