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Part $1$

Carmen has computed that her average tax rate is$16\%$ and her marginal tax rate is

$2424\%$

for the current year. She is considering whether to make a charitable contribution to her church before the end of the tax year. Which tax rate is of greater significance in measuring the tax effect for her$$ decision? Explain.

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Part $1$

The

marginal

tax rate is of greater significance in measuring the tax effect for$$ Carmen's decision. The

marginal

tax rate is the percentage that is applied to an incremental amount of taxable income that is

added to or subtracted from

the tax base.