Calculate the family marginal and average tax rates

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Reference no: EM131097902

Suppose the tax rate is 10% on the first $20,000 of taxable income, then 25% on the next $30,000, then 50% on all taxable income above $50,000. The government also provides a $4,000 exemption per family member. (a) Ben’s family has three members and earns $50,000 per year. Calculate the family’s marginal and average tax rates. (b) Jerry’s family has five members and earns $85,000 per year. Calculate the family’s marginal and average tax rates. (c) Compare the average tax rates for Ben’s and Jerry’s families. Is this tax system progressive, regressive or proportional?

Reference no: EM131097902

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