uppose the tax rates for single wage earners are:
00000 - 19999 = 0%
20000 - 49999 = 16%
50000 - 79999 = 24%
80000 - 119999 = 40%
120000 and above = 60%
SHOW ALL YOUR WORK (half credit for answers without work)
Calculate the marginal tax rate (MTR) and average tax rate (ATR) for a person earning $5,000 and one earning $60,000.
Is this tax system progressive, regressive, or proportional? How did you come to this answer?
Under what two circumstances can the MTR = ATR?
You earn $1,500,000. What is your MTR and ATR? Why might this negatively impact your incentive to add to your income?
Compare the total taxes for the $60,000 and the $1.5m income earner. What are some reasons that the lower income earner would feel that the tax system is unfair? Do the same for the higher income earner.