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If your income is [tex]$40,000 and your income tax liability is $[/tex]5,000, your marginal tax rate is:

A. 12.5 percent.
B. unknown. We do not have enough information to answer this question.
C. 20 percent.
D. 8 percent.

Sagot :

GinnyAnsweridn
To determine the marginal tax rate based on the given income and tax liability, we follow these steps:

1. Identify the Given Values:
- Income: [tex]$40,000 - Tax Liability: $[/tex]5,000

2. Understand the Marginal Tax Rate:
The marginal tax rate is the percentage of additional income that is taxed at a given level.

3. Calculate the Marginal Tax Rate:
The formula to calculate the marginal tax rate is:
[tex]\[ \text{Marginal Tax Rate} = \left( \frac{\text{Tax Liability}}{\text{Income}} \right) \times 100 \][/tex]

4. Substitute the Given Values into the Formula:
[tex]\[ \text{Marginal Tax Rate} = \left( \frac{5000}{40000} \right) \times 100 \][/tex]

5. Perform the Calculation:
- First, divide the tax liability by the income:
[tex]\[ \frac{5000}{40000} = 0.125 \][/tex]
- Then, multiply the result by 100 to convert it to a percentage:
[tex]\[ 0.125 \times 100 = 12.5 \][/tex]

6. Conclusion:
Thus, the marginal tax rate is 12.5 percent.

Therefore, the correct answer is:
- a. 12.5 percent.
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