Refer to Scenario 12-3. The taxpayer faces a marginal tax rate of

A) 30 percent when her income rises from $20,000 to $20,001.
B) 20 percent when her income rises from $20,000 to $20,001.
C) 20 percent when her income rises from $60,000 to $60,001.
D) 0 percent when her income rises from $20,000 to $20,001.

Marginal Tax Rate

The tax rate applied to the last dollar of income, showing the percentage of additional income that is paid in tax.

Income

The amount of money or value received, typically on a regular basis, for work or through investments.

Tax Rates

Tax rates refer to the percentage at which an individual or corporation is taxed on their income or property.