Question

True/False

The term tax bracket refers to the average tax rate that is applied to an individual's taxable income.

Answer 1

False.

Step-by-step explanation:

Although people normally refers to tax bracket and the average tax as the same thing, it is wrong.

A tax rate is the percentage at which the government tax an individual or a cooperation. And the greater the income, the more the government increases the tax rate.

Tax bracket is a way the government categorize income tax rates and each tax bracket has different tax rate.

For instance, between $0 - $10 000 tax bracket can have 10% tax rate and $10 001 - & $20 000 tax bracket can have 12% tax rate, and so on. Then you can now multiply your income with your tax rate to the tax owed.

Answer 2

False.

Step-by-step explanation:

A tax bracket is the tax rate applied to specific ranges of income.

For example, a 20% tax rate is applied to income between $500,000 - $700,000.

A tax rate of 23% is applied to income between $800,000 - $1,000,000.

I hope my answer helps you.