What is the marginal tax rate for a corporation with $60,000 of taxable income and an average tax...

Question:

What is the marginal tax rate for a corporation with $60,000 of taxable income and an average tax rate of 18% if the next lowest marginal tax rate of 15% covers taxable incomes up to $50,000?

A) 18%
B) 15%
C) 33%
D) 25%

Marginal Tax and Average Rate:

Marginal tax rate is the rate of tax at the next taxable dollar, while average tax rate is the rate of tax on the whole taxable amount. When a tax scheme is progressive (when the marginal tax increases with the taxable amount), average tax is never higher than marginal tax.

Answer and Explanation:

The answer is (C.) 33% is the marginal tax rate for a corporation with $60,000 of taxable income and an average tax rate of 18% if the next lowest...

See full answer below.

Become a Study.com member to unlock this answer! Create your account

View this answer

Learn more about this topic:

Loading...
What is a Marginal Tax Rate? - Definition & History

from Intro to Business: Help and Review

Chapter 24 / Lesson 8
6.4K

Related to this Question

Explore our homework questions and answers library