is, everyone gets a $10,000 deduction. What are the marginal and average tax rates for each of the following three workers? (Evaluate the mar- ginal tax rate at each person's current income level.) a.
is, everyone gets a $10,000 deduction. What are the marginal and average tax rates for each of the following three workers? (Evaluate the mar- ginal tax rate at each person's current income level.) a.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Suppose that the income tax in a certain nation
is computed as a flat rate of 5 percent, but no
tax is levied above $50,000 in taxable income.
Taxable income, in turn, is computed as the
individual's income minus $10,000; that is,
everyone gets a $10,000 deduction. What are
the marginal and average tax rates for each of
the following three workers? (Evaluate the mar-
ginal tax rate at each person's current income
level.)
a.
A part-time worker with annual income of
$9,000.
b.
A retail salesperson with annual income of
$45,000.
C.
An advertising executive with annual income
of $600,000.
Is the tax progressive, proportional, or regres-
sive with respect to income?
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