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 -
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.
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Authors: Thomas R. Pope, Timothy J. Rupert, Kenneth E. Anderson
29th Edition
134104374, 978-0134104379
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