Pei Chen has a federal personal income marginal tax rate of 28 percent.His average tax rate

A) is more than 28%.
B) is also 28%.
C) is less than 28%.
D) is zero.

Question

Pei Chen has a federal personal income marginal tax rate of 28 percent.His average tax rateA) is more than 28%.B) is also 28%.C) is less than 28%.D) is zero.

audrey dimella · Accepted Answer

Final Answer : C, Explanation :  The average tax rate is the total tax paid divided by total income. Pei Chen's marginal tax rate is 28%, which means he pays 28% on his next dollar of income. However, his average tax rate will be lower than 28% because the first dollars he earns are taxed at a lower rate. Therefore, option C is the best choice because Pei Chen's average tax rate is less than 28%.

Pei Chen has a federal personal income marginal tax rate of 28 percent.His average tax rate

A) is more than 28%.
B) is also 28%.
C) is less than 28%.
D) is zero.

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