Compute the marginal tax rate as income rises

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any income tax schedule embodies two types of tax rates: average tax rates and marginal tax rates. a. the average tax rate is defined as total taxes paid dividend by income. for the porportional tax system presented in table 7, what are the average tax rates for people earning $50,000, $100,000 and $200,000? what are the corresponding average tax rates in the regressive and progressive tax systems? b) the marginal tax rates is defined as the extra taxes paid on additional incomes divided by the increase in income.Calulate the marginal tax rate for the proportional tax system as income rises from $50,000 to income $100,000. Calculate the marginal tax rate as income rises from $100,000 to $200,000.Calculate the corresponding marginal tax rates for the regressive and progressive tax systems. c) describe the relationship between average tax rates and marginal tax rates for each of these three systems. in general, which rate is relevant for someone deciding whether to accept a job that pays slightly more than her current job? which rate is relevant for judging the vertical equity of a tax system?

Reference no: EM1355402

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