Final answer:
The tax rate on qualified dividends for individuals with a marginal ordinary income tax rate between 25% and 39.60% is 15%. This tax rate is separate from the individual's marginal tax rate which applies to ordinary income.
Step-by-step explanation:
When an individual's marginal ordinary income tax rate is 25% or more and less than 39.60%, the tax rate on qualified dividends is 15%. The tax brackets and corresponding marginal rates for income can vary based on factors such as marital status and family size. However, qualified dividends are taxed at a separate rate depending on the marginal tax rate.
For someone with a marginal tax rate of 25% to 35%, qualified dividends are taxed at a rate of 15%. In the example, if the individual's marginal tax rate on their last dollar of income is 15%, their qualified dividends would also be taxed at this same rate. It is essential to note that the marginal tax rate is different from the average tax rate, which is the overall fraction of income paid in taxes.