1. Suppose the marginal or bracket tax rate for income from $1 to $15,000 is 12%, the marginal tax rate for income between $15,001 and $30,000 is 20%, and the marginal tax rate for income between $30,001 and $50,000 is 25%. How much in taxes would someone with a $40,000 income pay? Is this tax system progressive, regressive, or proportional? Why?

1. Suppose the marginal or bracket tax rate for income from $1 to $15,000 is 12%, the marginal tax rate for income between $15,001 and $30,000 is 20%, and the marginal tax rate for income between $30,001 and $50,000 is 25%. How much in taxes would someone with a $40,000 income pay? Is this tax system progressive, regressive, or proportional? Why?

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter30: Government Budgets And Fiscal Policy

Section: Chapter Questions

Problem 4SCQ: Suppose that gifts were taxed at a rate of 10 for amounts up to 100,000 and 20 for anything over...

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