Which of the Following Statements Is False with Respect to Marginal

question 55

Multiple Choice

Which of the following statements is false with respect to marginal and average tax rates?

• A)For most taxpayers,the average rate is larger than the marginal rate.
• B)For taxable income greater than the lowest tax bracket,the average rate is always greater than the lowest marginal rate and less than the highest marginal rate.
• C)The average rate is the percentage of tax paid on the entire amount of taxable income.
• D)The marginal rate is the proportion of tax paid on the next dollar of taxable income.

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Definitions:

Salary

A fixed regular payment, typically paid on a monthly or biweekly basis but often expressed as an annual sum, made by an employer to an employee.

Progressive Tax

A tax whose burden, expressed as a percentage of income, increases as income increases.

City Wage Taxes

Taxes imposed by some cities on the earnings of individuals working within their jurisdiction.

Federal Government Revenues

The income received by the federal government from various sources, including taxes, fees, and charges, used to fund public services and projects.