Question

The marginal tax rate is the tax rate applied to:

• A. The first dollar of a person's income.
• B. The average dollar of a person's income.
• C. The tax bracket a person falls into.
• D. The last dollar of a person's income.

Answer 1

Answer:

D. The last dollar of a person's income.

• The marginal tax rate is the tax rate on the next unit of income or on the last dollar earned.