Marginal tax rate example. Sara has an income of $75,000, with a marginal rate of 25%. The next highest tax bracket is 30%. If $75,300 is the cutoff for the 25% bracket and this individual An average tax rate is the ratio of the total amount of taxes paid, T, to the total tax base, P, whereas the marginal tax rate equals the change in taxes, divided by the change in tax base. A proportional tax is a tax imposed so that the tax rate is fixed, with no change as the taxable base amount increases or decreases. We'll start first with the fact that the U.S. tax system is a progressive tax. That means as someone's income increases, their tax rate increases too. This is where the idea of a marginal tax rate