Question 10 D l 1 pts 'rect Answer "> There are two individuals in a society. The federal income tax in this society is such that that the first $20,000 of income is taxed at 10% and income above that is taxed at 30%. The federal government allows taxes paid to local governments to be deducted. James earns a gross income of $40,000, and Jane earns a gross income of $65,000. Out of his income, James pays $1 ,000 in local taxes; out of her income, Jane pays $20,000 in local taxes. Which of the following statements is true? James' total (local + federal} tax bill is greater than Jane's total tax bill. The federal tax system is proportional. The federal tax system is regressive The federal tax system is progressive