Progressive tax: Progressive tax is basically as the average tax rate which increases gradually as the taxable amount increases. The term “progressive” is definedas that amount changes from a lower value to a higher value. Tax credit: Tax credit is basically defined as the credit or in other words amount that is subtracted from tax and hence the tax owed becomes less. The reason behind effective tax rates for second quarter lower than first quarter, although no tax credits are there and additional amounts of income is taxed.

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Chapter 12, Problem 1.4E

To determine

Progressive tax:

Progressive tax is basically as the average tax rate which increases gradually as the taxable amount increases. The term “progressive” is definedas that amount changes from a lower value to a higher value.

Tax credit:

Tax credit is basically defined as the credit or in other words amount that is subtracted from tax and hence the tax owed becomes less.

The reason behind effective tax rates for second quarter lower than first quarter, although no tax credits are there and additional amounts of income is taxed.

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