The table below shows an income tax schedule for the imaginary country of Republica. Kermit is a citizen of Republica who earns $82,000 per year at his job. Assume Kermit is not eligible for any deductions or exemptions. Marginal tax rate (%) 10 Taxable income $0-$15,000 $15,001-$30,000 $30,001-$75,000 $75,001-$155,000 $155,001+ 15 25 30 35 a. How much does Kermit pay in income tax? $ b. What is Kermit's marginal tax rate? c. What is his average tax rate?
The table below shows an income tax schedule for the imaginary country of Republica. Kermit is a citizen of Republica who earns $82,000 per year at his job. Assume Kermit is not eligible for any deductions or exemptions. Marginal tax rate (%) 10 Taxable income $0-$15,000 $15,001-$30,000 $30,001-$75,000 $75,001-$155,000 $155,001+ 15 25 30 35 a. How much does Kermit pay in income tax? $ b. What is Kermit's marginal tax rate? c. What is his average tax rate?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Please answer sections a-f.

Transcribed Image Text:Suppose that when Casper earns $50,000, he must pay $5,000 in taxes. When his income rises to $75,000, he must pay $7,000 in taxes.
d. What is Casper's marginal tax rate?
e. What was Casper's initial average tax rate?
%
What is Casper's new average tax rate?
%
f. Is this tax system progressive, regressive, or proportional?

Transcribed Image Text:The table below shows an income tax schedule for the imaginary country of Republica. Kermit is a citizen of Republica who earns $82,000 per
year at his job. Assume Kermit is not eligible for any deductions or exemptions.
Marginal tax
rate (%)
Taxable income
$0-$15,000
$15,001-$30,000
$30,001-$75,000
$75,001-$155,000
$155,001+
10
15
25
30
35
a. How much does Kermit pay in income tax? $
b. What is Kermit's marginal tax rate?
%
c. What is his average tax rate?
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