On another tread a poster mentioned a marginal tax rate. The context was a earner between 50-60K with 3 children having a marginal tax rate of 68% can someone explain this please. (That thread is closed)
No you don't, but there is another name for the rate you pay overall (i.e. your total tax divided by your total taxable income) which is the "average rate".
The "marginal rate" is the rate that applies to marginal income i.e. the amount of tax taken from (or the amount by which benefits are reduced for) the next pound that you earn. They are an important measure because (i) high marginal rates can be indicative of a poorly designed system and (ii) they can be a disincentive to work - clearly as the marginal rate approaches 100% (and for certain benefit combinations it can actually exceed 100%) where every additional £ you earn is lost in taxation/withdrawal of benefits.