If taxable income is rising and if the marginal tax rate is greater than the average tax rate,then

A) the average tax rate must be rising.
B) the average tax rate must be falling.
C) the average tax rate may be either rising or falling.
D) the tax is regressive.

Marginal Tax Rate

The tax rate that applies to the next dollar of taxable income; the percentage of tax applied to your income for each tax bracket in which you qualify.

Taxable Income

The amount of income that is subject to tax, after all allowable deductions, exemptions, and adjustments.

Average Tax Rate

The ratio of the total amount of taxes paid to the total income, showing the percentage of income paid in taxes.