Which of the following is true about the marginal tax rate?
The marginal tax rate is calculated as the total amount of taxes paid divided by the taxable income.
The marginal tax rate is the tax rate for the last dollar of income.
The marginal tax rate is the tax rate applied to every dollar of income.
The marginal tax rate always increases with a corporation's income.
Answer
Option 2
The marginal tax rate is the tax rate for the last dollar of income
The marginal tax rate is a tax on the portion of the last dollar of income or the extra dollar of income.
Which of the following is true about the marginal tax rate? The marginal tax rate is...
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The nominal tax rate is Multiple Choice Lower than the effective tax rate. Taxes paid divided by total economic income. Taxes paid divided by taxable income. Equal to the marginal tax rate.
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Marginal and average tax rates Using the tax rate schedule given here perform the following: a. Calculate the tax liability, after-tax earnings, and average tax rates for the following levels of partnership earnings before taxes: $11,700; $81,200; $295,000; $500,000; $1.3 million; $1.7 million; and $1.9 million. b. Plot the average tax rates (measured on the y axis) against the pretax income levels (measured on the x axis). What generalization can be made concerning the relationship between these variables? a. Find...
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A firm's average tax rate is based on the total tax due divided by the taxable income. This rate is normally greater than the firm's marginal tax rate. true or false
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