If your taxable income increases from $20,000 to $40,000,your marginal tax rate is

A) 5 percent.
B) 7.5 percent.
C) 10 percent.
D) 12.5 percent.
E) 15 percent.

Question

If your taxable income increases from $20,000 to $40,000,your marginal tax rate isA) 5 percent.B) 7.5 percent.C) 10 percent.D) 12.5 percent.E) 15 percent.

Rebecca Evans · Accepted Answer

Final Answer : C, Explanation :  The marginal tax rate is calculated by the increase in taxes paid divided by the increase in taxable income. From $20,000 to $40,000, taxes increase from $0 to $2,000, and income increases by $20,000. Thus, the marginal tax rate is $2,000 / $20,000 = 10%.

If your taxable income increases from $20,000 to $40,000,your marginal tax rate is

A) 5 percent.
B) 7.5 percent.
C) 10 percent.
D) 12.5 percent.
E) 15 percent.

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