Calculate the marginal tax rate and average tax rate

Assignment Help Econometrics

Reference no: EM13233712

Suppose the tax rates for single wage earners are:

00000 - 9999 = 0%
10000 - 19999 = 10%
20000 - 29999 = 22%
30000 - 39999 = 35%
40000 and above = 60%

1.)Calculate the marginal tax rate (MTR) and average tax rate (ATR) for a person earning $15,000 and one earning $35,000.

2.)Is this tax system progressive, regressive, or proportional? Describe fully

3.)Is it ever possible for the MTR = ATR? When?

4.)You earn $1,500,000. What is your MTR and ATR? How motivated are you to add to your income?

5.) Would you be in favor of a flat-tax rate system for income earners? Explain. Why would this not really simplify the tax system as many people argue?

Reference no: EM13233712

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