Asked by Jayla Davis on Apr 25, 2024
The marginal tax rate is the total tax liability divided by the taxable income.
Marginal Tax Rate
The rate at which the last dollar of income is taxed, representing the rate that applies to each additional dollar of income, important for financial planning and decision-making.
Tax Liability
The total amount of tax owed to the government based on income, asset sales, and other taxable events within a given fiscal period.
Taxable Income
The portion of an individual's or entity's income that is subject to taxation after allowances, exemptions, and deductions.
- Clarify the procedure for calculating average and marginal tax rates and their connection to income subject to tax.
Learning Objectives
- Clarify the procedure for calculating average and marginal tax rates and their connection to income subject to tax.