Regarding income taxes, which do you think is more important (and why)-- the average tax rate that a firm pays for the marginal tax rate the firm is paying?

Respuesta :

Answer:

average tax rate

Explanation:

Based on these two tax rates I would say that the more important of the two is  average tax rate. This is because the average tax rate is the total taxes you have paid divided by your total income. This therefore will always be less than the marginal tax rate because the this tax rate is divided by tax brackets which since the average tax rate is specific it will never reach the limit of the tax bracket making it less than the marginal tax rate.