Your Take-Home Pay Is What You Are Left with After

question 35

Multiple Choice

Your take-home pay is what you are left with after subtracting withholdings from your:

• A) gross earnings.
• B) net earnings.
• C) taxable income.
• D) adjusted gross income (AGI).
• E) tax-exempt income.

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Definitions:

Vertical Equity

A concept in taxation that argues taxpayers with a greater ability to pay taxes should pay more, compared to those with a lesser ability to pay.

Marginal Tax Rate

The tax rate that applies to the last dollar of the tax base (income or wealth) earned.

Average Tax Rate

The ratio of total taxes paid to total income, representing the percentage of income that goes to taxes.

Income

The money received by a person or household from various sources like work, investments, or benefits, typically used for consumption, savings, and investing.