The tax rate that is the present value of the additional tax on one dollar of additional taxable income is referred to as the:

Question

Quizplus · Accepted Answer

The marginal tax rate is the tax rate that applies to the next dollar of income earned. It reflects the additional tax paid on the last dollar earned and is calculated as the ratio of the change in tax to the change in income. Therefore, it can be considered as the present value of the additional tax on one dollar of additional taxable income.

The Tax Rate That Is the Present Value of the Additional