The marginal tax rate and the average tax rate are the same under a

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Under a proportional income tax system, the marginal tax rate and the average tax rate are the same. This is because under a proportional tax system, the tax rate is constant and does not change with the level of income earned. In contrast, under a progressive tax system, the marginal tax rate (the rate at which additional income is taxed) is higher than the average tax rate (the overall tax rate on all income earned) at higher levels of income. Similarly, under a regressive tax system, the marginal tax rate is lower than the average tax rate at higher levels of income. Finally, under a consumption tax system, the marginal tax rate and the average tax rate may be different, depending on the design of the tax system.

The Marginal Tax Rate and the Average Tax Rate Are