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.

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Cara Nielsen

18 July, 13:43

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.

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Ayana Burgess · Answer 1

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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.