Asked by
Tejaswini Reddy
on Dec 11, 2024Verified
The average tax rate is defined as
A) the average number of times a circulating dollar is taxed during a year.
B) the change in the tax rate as income increases.
C) the change in the tax rate as income decreases.
D) tax liability divided by taxable income.
Average Tax Rate
The portion of total income that is paid in taxes, calculated by dividing the total tax paid by the taxpayer’s total income.
Tax Liability
The total amount of tax that an individual, corporation, or other entity is legally obligated to pay to a taxing authority.
Taxable Income
The portion of an individual's or company's income used to calculate how much tax they owe to the government.
- Perform computations to identify differences between the average and incremental tax rates.
- Analyze the consequences of divergent tax rates (marginal, average, progressive, and regressive) on income distribution.
Verified Answer
MÇ
Learning Objectives
- Perform computations to identify differences between the average and incremental tax rates.
- Analyze the consequences of divergent tax rates (marginal, average, progressive, and regressive) on income distribution.