Re: Tax question...
Exactly right. Everything else equal, you don't give a [censored] about your average tax rate (well, you do, but it's irrelevant here). You want to know at what rate each additional dollar will be taxed - the marginal rate.
Before deciding to invest or not, let's say you have your established taxable income, $X, during a given year. This is the fixed salary or whatever that you know you will earn regardless of other investments. Your expected tax liability = your effective (average) tax rate * $X. Yes, this should be obvious. Now, when considering an investment and its return, $Y, you're looking at ADDING that to your current taxable income. Do you see why the marginal tax rate is the relevant one?
Of course you could play games with the numbers and say that the timing of the investment return and your salary occur simultaneously, thus making it difficult to assign a specific tax bracket to a piece of your income - in this case, you just aggregate the income and apply your effective tax rate. Looking at it this way is merely changing the syntax of your income composition and really isn't the usual or practical way of looking at it.
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