Consider an income-tax system that has four tax brackets

Assignment Help Business Economics

Reference no: EM131094727

Consider an income-tax system that has four tax brackets. The following table shows the marginal tax rate that applies to the income in each tax bracket.

Earned Income Tax Rate in Bracket (%)

Up to $20,000 0%

$20,001-$40,000 15%

$40,001-$80,000 30%

$80,001 and higher 35%

1. Compute the average income-tax rate at income levels $10,000 and $20,000, and each increment of $10,000 up to $120,000.

2. Compute the marginal income-tax rate for each level of income in [1].

3. Is this tax system progressive? Explain.

Reference no: EM131094727

Questions Cloud

Briefly explain the different types of unemployment : Briefly explain the different types of Unemployment? What is relationship between inflation and unemployment? A country has 245.9 million of working-age population, out of which 155.5 million are in labor force. From total labor force, 144.2 million ..

Gross domestic product and gross national product : Differentiate the followings; Gross Domestic Product (GDP) Vs Gross National Product (GNP), Net National Product (NNP) Vs National Income (NI), Real GDP Vs Nominal GDP, Real Wages Vs Nominal Wages.

Building well-networked organization : Leaders and human resources professionals are searching for ways to generate more value from their employees. Finding new approaches for optimizing talent is a critical aspect of organizational performance. The Hackett Group, an operations improvemen..

Some pros and cons to command-and-control strategies : What are some pros and cons to command-and-control strategies. How does C-and-C compare to Incentive strategies? In general, do you favor such strategies? Under which conditions? Please provide your rationale.

Consider an income-tax system that has four tax brackets : Consider an income-tax system that has four tax brackets. The following table shows the marginal tax rate that applies to the income in each tax bracket. Compute the average income-tax rate at income levels $10,000 and $20,000, and each increment of ..

Market equilibrium and preferable to the alternative : Why do economists tend to react in a hostile fashion to prposals for quotas, or for price ceilings and price floors? Recall and describe case(s) in which such interferences with the market equilibrium and preferable to the alternative, and explain wh..

Government expenditures as either a transfer payment : Classify each of the following government expenditures as either a transfer payment or a purchase of goods and services. Which ones clearly tend to decrease the inequality of income distribution?

Attribute the difference to the effects of unionization : In trying to measure the extent to which labor unions are responsible for increasing wages, economists use sophisticated statistical methods to compare the wages of unionized workers with those of non-unionized workers. Explain why it is not legitima..

Equal pay for work of equal value : “Equal pay for work of equal value” is a commonly held goal, but “equal value” is hard to define. What would be the consequences of legislation that enforces equal pay for what turns out to be work of unequal value?

User Account

All Pages