BuyFindarrow_forward

ECON: MICRO4 (New, Engaging Titles...

4th Edition
William A. McEachern
ISBN: 9781285423548

Solutions

Chapter
Section
BuyFindarrow_forward

ECON: MICRO4 (New, Engaging Titles...

4th Edition
William A. McEachern
ISBN: 9781285423548
Textbook Problem

(Tax Rates) Suppose taxes are related to income as follows:

Income Taxes

$1,000

$200

$2,000

$350

$3,000

$450

a. What percentage of income is paid in taxes at each level?

b. Is the tax rate progressive, proportional, or regressive?

c. What is the marginal tax rate on the first $1,000 of income?

The second $1,000? The third $1,000?

To determine

The taxes for various income.

Introduction:

Progressive tax rate: It is defined as the system wherein taxes increase as the income increases, wherein high-income taxpayers pay more taxes as compared to the low-income taxpayers.

Regressive tax rate: It is defined as the system wherein the taxes decrease as the income increases, wherein high-income taxpayers pay fewer taxes as compared to low-income taxpayers

Proportionate tax rate: It is defined as the system wherein a flat tax rate is charged to all taxpayers irrespective of the income earned by them.

Marginal tax rate: The tax paid on an additional dollar of the income is termed as the Marginal tax rate. In other words, it is an incremental tax paid on the incremental income

Explanation

a. Percentage of income paid as taxes at each level:

    •2001000×100=20%

    •3502000×100=17.5%

    •4503000×100=15%

b. The percentages for income levels of $1,000, $2,000, and $3,000 are 20 percent, 17.5 percent, and 15 percent, respectively.

c

Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Additional Business Solutions

Find more solutions based on key concepts

Show solutions add

What are information processing activities?

Accounting Information Systems

What is a plan? Differentiate between the major types of plans.

Foundations of Business (MindTap Course List)

Describe a plant asset.

College Accounting, Chapters 1-27

What is the purpose of a credit memo?

College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)

What is a relation? What is a tuple?

Pkg Acc Infor Systems MS VISIO CD

CASH BUDGETING Rework Problem 15-10 using a spreadsheet model. After completing Parts a through d, respond to t...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)