Question
Suppose you live in the hypothetical country of Evergreen. Evergreen does not tax the first $10,000 of income, but imposes a tax of 10% on
Suppose you live in the hypothetical country of Evergreen. Evergreen does not tax the first $10,000 of income, but imposes a tax of 10% on the next $30,000 of income, 20% on the following $60,000, and a top rate of 30% on any income above $100,000.
a. Suppose your income is $20,000. What is your marginal tax rate? What is your average tax rate?
b. Further suppose your neighbor's income is $50,000. What is her marginal tax rate? What is her average tax rate?
c. Is Evergreen's tax structure progressive, proportional, or regressive?
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Mathematical Applications for the Management Life and Social Sciences
Authors: Ronald J. Harshbarger, James J. Reynolds
11th edition
9781337032247, 9781305465183, 1305108043, 1337032247, 1305465180, 978-1305108042
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