In a proportional (flat)tax rate system, the marginal tax rate will always equal the average tax rate.

Question

Quizplus · Accepted Answer

In a proportional tax system, everyone pays the same percentage of their income in taxes. Since the tax rate is constant for all levels of income, the marginal tax rate (the tax rate on the next dollar earned) is always the same as the average tax rate (the total tax paid divided by total income). Therefore, the statement is true.

In a Proportional (Flat)tax Rate System, the Marginal Tax Rate