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b. The tax system is regressive for income levels less than $100,000 and progressive for income levels above $100,000. c. The tax system is progressive for income levels less than $100,000 and regressive for income

b. The tax system is regressive for income levels less than $100,000 and progressive for income levels above $100,000. c. The tax system is progressive for income levels less than $100,000 and regressive for income

Economics (MindTap Course List)
Economics (MindTap Course List)
13th Edition
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Roger A. Arnold
Chapter11: Fiscal Policy And The Federal Budget
Section: Chapter Questions
Problem 5WNG
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Suppose that the government collected taxes in the following fashion: people who earn less than $50,000 pay 25 percent in taxes, people who earn between $50,000 and $100,000 pay 35 percent in taxes, people who earn between $100,000 and $200,000 pay 30 percent in taxes, and people who earn more than $200,000 pay 28 percent in taxes. Which of the following statements is correct? a. The tax system is proportional for income levels less than $50,000 and regressive for income levels above $50,000. b. The tax system is regressive for income levels less than $100,000 and progressive for income levels above $100,000. c. The tax system is progressive for income levels less than $100,000 and regressive for income levels above $100,000 . d. The tax system is progressive for income levels less than $50,000 and proportional for income levels above $100,000.
Transcribed Image Text:Suppose that the government collected taxes in the following fashion: people who earn less than $50,000 pay 25 percent in taxes, people who earn between $50,000 and $100,000 pay 35 percent in taxes, people who earn between $100,000 and $200,000 pay 30 percent in taxes, and people who earn more than $200,000 pay 28 percent in taxes. Which of the following statements is correct? a. The tax system is proportional for income levels less than $50,000 and regressive for income levels above $50,000. b. The tax system is regressive for income levels less than $100,000 and progressive for income levels above $100,000. c. The tax system is progressive for income levels less than $100,000 and regressive for income levels above $100,000 . d. The tax system is progressive for income levels less than $50,000 and proportional for income levels above $100,000.
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