Question: In financial decision making, which is most important: the average or the marginal tax rate? average, because that is what is paid on an additional

In financial decision making, which is most important: the average or the marginal tax rate?

average, because that is what is paid on an additional dollar earned, and thus impacts your incentive to earn that additional dollar

marginal, because that is what is paid on an additional dollar earned, and thus impacts your incentive to that additional dollar

average, because, by definition, marginal is small

marginal, because, by definition marginal is small

neither average or marginal is important, because business people are not concerned about after tax cash flows

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