The tax rate percentage paid on income taxes is called the marginal. The correct answer is: B. incremental.
Fixed: A fixed tax rate would mean everyone pays the same percentage of their income, regardless of how much they earn. This is not the case with marginal tax rates.
Incremental: This is the correct answer. The marginal tax rate is the additional tax paid on each additional dollar of income earned. As your income increases, you may move into higher tax brackets, meaning the marginal tax rate on your next dollar earned will be higher.
Total: The total tax rate is the total amount of taxes you pay divided by your total income. This is not specific to each additional dollar earned and doesn't represent the "marginal" aspect.
Average: The average tax rate is the total amount of taxes you pay divided by your total income, similar to the total tax rate. However, it doesn't capture the changes in the tax rate as your income increases, unlike the marginal tax rate.
Therefore, the term "marginal" specifically refers to the additional tax paid on each additional dollar of income earned, making it the most accurate description of the tax rate percentage.