Consider the following to tax schemes: In the first tax scheme the first 300$ is tax exempt and the remaining earning are taxed at 20%. In the second system there is no tax exemption but the tax rate is 25% over the whole income earned? Which tax system is more progressive? Make sure that you define your measures of tax progressivity and show whether they conflict with each other or not.

Survey Of Economics
10th Edition
ISBN:9781337111522
Author:Tucker, Irvin B.
Publisher:Tucker, Irvin B.
Chapter16: The Public Sector
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  1. Consider the following to tax schemes:

In the first tax scheme the first 300$ is tax exempt and the remaining earning are taxed at 20%. In the second system there is no tax exemption but the tax rate is 25% over the whole income earned? Which tax system is more progressive? Make sure that you define your measures of tax progressivity and show whether they conflict with each other or not.

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