When the marginal tax rate exceeds the average tax rate, the tax is progressive.

Name: When the marginal tax rate exceeds the average tax rate, the tax is progressive.
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If the marginal tax rate (the tax rate on the last dollar earned) is higher than the average tax rate (total tax paid divided by total income), the tax system is considered progressive. This means that those who earn more income pay a higher percentage of their income in taxes.

When the Marginal Tax Rate Exceeds the Average Tax Rate