4.7) Consider a national income tax that is structured as follows:IncomeMarginal taxrate$0-$10,0000% $10,001--$60,0005% $60,001andabove0% For each of the following workers determine his or her marginal and average tax rated.Would you describe the tax system as proportional, regressive, or progressive? Explain

Question
Asked Oct 31, 2019

 

4.7) Consider a national income tax that is structured as follows:
Income
Marginal tax
rate
$0-$10,000
0%
 
$10,001--
$60,000
5%
 
$60,001and
above
0%
 
For each of the following workers determine his or her marginal and average tax rate

d.

Would you describe the tax system as proportional, regressive, or progressive? Explain

 

 

check_circleExpert Solution
Step 1

d.

The tax is the unilateral payment that the individuals should make to the government for various purposes such as for the income they earn, for the property that they own, for the profession they have etc. Thus, the tax is a unilateral payment.

Step 2

There are many different types of tax systems and they are the Progressive taxation, proportional taxation and the regressive taxation. The progressive taxation is the taxation method in which the tax rate increases as the income of the individual increases. When the tax rate decreases as the income increases, it is known as the regressive taxation. When the tax rate remains the same at all levels of income, then it is known as the proportional taxation.

Step 3

In this case, the tax is charged for the individuals who earn the income of above $10,000. Thus, the tax rate is charged for any income level above $10,000. When the tax rate is considered, the tax rate charged for those earning an income...

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