marginal tax rate

Definition of "marginal tax rate"
  1. The rate at which the next dollar of an individual's or a business's income is taxed
How to use "marginal tax rate" in a sentence
  1. A higher marginal tax rate discourages individuals from earning additional income.
  2. Businesses calculate their expenses considering the marginal tax rate.
  3. Understanding the marginal tax rate can help in effective financial planning.

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