Scenario 12-4 A Taxpayer Faces the Following Tax Rates on Her Income

Multiple Choice

Scenario 12-4
A taxpayer faces the following tax rates on her income:
20 percent of the first $40,000 of her income;
30 percent of all her income above $40,000.
-Refer to Scenario 12-4. The taxpayer faces a marginal tax rate of

A) 20 percent when her income rises from $40,000 to $40,001.
B) 20 percent when her income rises from $30,000 to $30,001.
C) 0 percent when her income rises from $30,000 to $30,001.
D) 10 percent when her income rises from $40,000 to $40,001.