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5 (10 points) Using information from the table below, calculate the average tax rate and marginal tax rate as income changes from 20 000 to
5 (10 points) Using information from the table below, calculate the average tax rate and marginal tax rate as income changes from 20 000 to 50 000 and from 50 000 to 100 000 for tax system A, B, and C. Describe the relationship between average tax rates and marginal tax rates for each of these three systems. Which rate is more relevant for judging the vertical equity of a tax system? 20 000 50 000 100 000 (A) Amount of Tax 5 000 12 500 25 000 (B) Amount of Tax 6 000 12 500 20 000 (C) Amount of Tax 4 000 12 500 30 000
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