What is the difference between the marginal tax rate and the average tax rate for corporations in the US?
The marginal tax rate represents the rat...
What is the difference between the marginal tax rate and the average tax rate for corporations in the US?
The marginal tax rate represents the rate at which additional income above the base income level is taxed. The average tax rate is calculated by dividing the taxes paid by the taxable income. The marginal tax rate and the average tax rate are the same for corporations with incomes of hundreds of millions or even billions of dollars. In most decisions made by corporate managers, the marginal tax rate is the one that really matters.
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