Question

Marginal tax rate is of greater significance in measuring the tax effect for​ Carmen's decision. The marginal tax rate is the percentage that is applied to an incremental amount of taxable income that is added to or subtracted from the tax base.

Answer 1

Answer:

True

Explanation:

The marginal tax rate is defined as the tax rate (in percentage) that is applied to an increase in taxable income. Through the marginal tax rate, a taxpayer can measure the effect of any increase in total taxable income or the effects of any deductions taken.

For example, your current marginal tax rate is 24%, that means that out any additional $100 that your earn, you will be taxed $24. This also applies to deductions, if you donate $100 to a qualifying charity, your taxes will lower by $24.