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February 28, 2015

Homework Help: Economics

Posted by Sally on Tuesday, November 14, 2006 at 3:08pm.

The marginal tax rate is defined as the extra taxes paid on additional income divided by the increase in income. Calculate the marginal tax rate for the proportional tax system as income rises from $50,000 to $100,000. Calculate the marginal tax rate as income rises from $100,000 to $200,000. Calculate the corresponding marginal tax rates for the regressive and progressive tax systems.

I believe that the answers are 25% for both the income rises from $50,000 to $100,000 and from $100,000 to $200,000 for the proportional tax system.


Income Average tax rate
proportional tax system
$50,000 25%
$100,000

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