Marginal tax rate

 

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Marginal tax rate

The additional tax which someone pays on each 1 increase of his or her taxable income. In the UK the tax bands for 2003-2004 tax year are:10 per cent on the first slice of earnings22 per cent on next slice40 per cent on top sliceUnder the 'progressive' tax system, once someone's earnings take him into the top tax bracket, any extra earnings will be taxed at the top rate. So someone who is in the 40 per cent bracket has a marginal tax rate of 40 per cent.

Marginal tax rate

The tax rate that would have to be paid on any additional dollars of taxable income earned.



Marginal tax rate

Similar Matches

Marginal utility

Marginal utility

The change in total satisfaction as a result of consuming one additional unit of a specific good or service.


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The value of the marginal product of a factor in an industry; that is, the price of the good produced times the marginal product. Determines factor prices when all markets are competitive.


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The change in total revenue as a result of producing one additional unit of output.


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The fraction of a change in income (or perhaps disposable income) that is saved.


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The additional revenue generated by the extra output from employing one more unit of a factor of production. In a competitive industry this equals the marginal value product, but with imperfect competition it is smaller, due to the implied price reduction. Determines factor prices in competitive factor markets.


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