marginal tax rate
Barron's Finance & Investment Dictionary:
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marginal tax rate
amount of tax imposed on an additional dollar of income. In the U.S. progressive income tax system, the marginal tax rate increases as income rises. Economists believing in supply-side economics hold that this reduces the incentive to be productive and discourages business investment. In urging that marginal tax rates be cut for individuals and businesses, they argue that the resulting increased work effort and business investment would reduce stagflation.
See also flat tax.
See also flat tax.
| Marginal Revenue, Marginal Efficiency of Capital | |
| Marginal Utility, Marital Deduction |
Dictionary of Cultural Literacy: Economics:
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marginal tax rate
The rate at which income over a certain amount is taxed. Although in general, graduated income taxes impose higher tax rates on higher incomes, the tax rate does not rise for each additional dollar earned. Rather, it rises by income brackets, and each tax rate applies only to income that falls in that bracket. For example, in 2002, the highest marginal federal tax rate was 38.5 percent, which for single taxpayers was imposed on income in excess of $54,000.
Investopedia Financial Dictionary:
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Marginal Tax Rate
The amount of tax paid on an additional dollar of income. As income rises, so does the tax rate.
Investopedia Says:
Many believe this discourages business investment by removing the incentive to work harder.
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Copyrights:
Barron's Finance & Investment Dictionary
Dictionary of Finance and Investment Terms. Copyright © 2010 by Barron's Educational Series, Inc. All rights reserved.
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Dictionary of Cultural Literacy: Economics
The New Dictionary of Cultural Literacy, Third Edition Edited by E.D. Hirsch, Jr., Joseph F. Kett, and James Trefil. Copyright © 2002 by Houghton Mifflin Company. Published by Houghton Mifflin. All rights reserved. Read more
Mentioned in
Tax Rate Schedule
(in accounting)
Average Tax Rate
(business term)
Cost of Debt
(in accounting)
Effective Tax Rate
(in accounting)
Kiddie Tax
(business term)
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