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Economics 1st Edition by Dean Karlan,Jonathan Morduch
Edition 1ISBN: 978-0073511498Economics 1st Edition by Dean Karlan,Jonathan Morduch
Edition 1ISBN: 978-0073511498 Exercise 10
Determine whether each of the following taxes is proportional, regressive, or progressive.
a. An income tax of 25 percent on income from all sources.
b. An income tax with three brackets and corresponding marginal tax rates: 10 percent for income up to $50,000; 20 percent for income up to $100,000; and 30 percent for income over $100,000.
c. A fee of $500 per year for municipal services, charged to everyone who lives within the city limits.
d. A capital gains tax that charges a flat rate of 40 percent, but only on capital gains over $1 million.
e. A payroll tax of 10 percent on income under $200,000.
a. An income tax of 25 percent on income from all sources.
b. An income tax with three brackets and corresponding marginal tax rates: 10 percent for income up to $50,000; 20 percent for income up to $100,000; and 30 percent for income over $100,000.
c. A fee of $500 per year for municipal services, charged to everyone who lives within the city limits.
d. A capital gains tax that charges a flat rate of 40 percent, but only on capital gains over $1 million.
e. A payroll tax of 10 percent on income under $200,000.
Explanation
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Regressive tax:
Regressive tax refers t...
Economics 1st Edition by Dean Karlan,Jonathan Morduch
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