Asked by Trent Crosswell on May 18, 2024
Verified
A married couple pays $500 in federal income tax.How much is their marginal tax rate and their average tax rate?
Marginal Tax Rate
The rate at which an additional dollar of income is taxed, serving as a useful measure of the impact of taxes on incentives to earn more.
Average Tax Rate
The ratio of the total amount of taxes paid to the taxpayer's total taxable income.
Federal Income Tax
A tax levied by the federal government on individuals' and businesses' annual earnings, used to fund public services and government obligations.
- Explore the differences and how to perform calculations for marginal versus average tax rates.
Verified Answer
NA
Learning Objectives
- Explore the differences and how to perform calculations for marginal versus average tax rates.