Final answer:
John's average tax rate is 40 percent while his marginal tax rate is 43 percent, calculated based on the increase in tax corresponding to an increase in income.
Step-by-step explanation:
John's average tax rate is found by dividing the total tax paid by his total income. In this case, John pays $10,000 in tax on an income of $25,000, which gives him an average tax rate of 10,000 / 25,000 = 0.40, or 40 percent. The marginal tax rate is the rate of tax that is paid on an additional dollar of income. As John's income increases by $100, his tax increases by $43, implying a marginal tax rate of 43 / 100 = 0.43, or 43 percent. So, John's average tax rate is 40 percent and his marginal tax rate is 43 percent.
The average tax rate is the ratio of taxes paid to income. In this case, John's average tax rate can be calculated by dividing his tax payment of $10,000 by his income of $25,000 and multiplying by 100% to express it as a percentage. So, John's average tax rate is 40%.
The marginal tax rate is the rate paid on an additional dollar of income. In this case, since John's tax increases by $43 when his income increases by $100, his marginal tax rate can be calculated by dividing the change in tax ($43) by the change in income ($100) and multiplying by 100% to express it as a percentage. So, John's marginal tax rate is 43%.