When a tax system is progressive, with higher rates on higher levels of income, your average tax rate will always be _______ your marginal rate.

Question

Quizplus · Accepted Answer

In a progressive tax system, the marginal tax rate (the rate on the last dollar earned) is higher than the average tax rate (total taxes paid divided by total income), because higher rates apply only to income above certain thresholds.

When a Tax System Is Progressive, with Higher Rates on Higher