If your income is $40,000 and your income tax liability is $5,000, your marginal tax rate is

A) 8 percent.
B) 12.5 percent.
C) 20 percent.
D) unknown.We do not have enough information to answer this question.

Marginal Tax Rate

The rate at which the last dollar of income is taxed, representing the tax burden on the next dollar of income.

Income Tax Liability

The total amount of income tax that an individual or business owes to the government based on their taxable income.

Income

The amount of money or its equivalent received during a period of time in exchange for labor or services, from the sale of goods or property, or as a profit from financial investments.