A Marginal Tax Rate of 91 Percent Means That

question 31

Multiple Choice

A marginal tax rate of 91 percent means that

• A) total tax is calculated by taking 91 percent of income.
• B) total tax is calculated by taking 9 percent of income.
• C) for each additional dollar earned,only 91 cents can be used toward consumption.
• D) for each additional dollar earned,only 9 cents can be used toward consumption.
• E) for each additional dollar earned,9 cents is taxed away.

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