Suppose that the income tax schedule in Stankonia is a flat 5% rate, but everyone receives a
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Question:
Suppose that the income tax schedule in Stankonia is a flat 5% rate, but everyone receives a deduction of $10,000 (taxable income is income - deduction). Additionally, no taxes are levied on taxable income above $100,000.
a) What are the average and marginal tax rates faced by a worker with $9000 income? $45000? $300000?
b) Is this system progressive? Explain.
Related Book For
Federal Taxation 2016 Comprehensive
ISBN: 9780134104379
29th edition
Authors: Thomas R. Pope, Timothy J. Rupert, Kenneth E. Anderson
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