Explore BrainMass

Determining the Taxation Procedure

How do you calculate a marginal tax rate if all you get are these stats? Could you please show your work so I can do this on my own if it's on a test? Thanks!

Suppose taxes are related to income level as follows:


$1,000 / $200
$2,000 / $350
$3,000 / $450

Is the tax rate progressive, proportional or regressive?
What is the marginal tax rate on the first $1,000 of income? The second? The third?

© BrainMass Inc. brainmass.com June 22, 2018, 4:43 pm ad1c9bdddf

Solution Preview

The marginal tax rate is the tax that you pay on each additional dollar you earn. With the data you have here this is the way to interpret it:

First $1000 that you earn will require you to pay a tax of $200.
The next $1000 ...

Solution Summary

Determine whether a given tax system is proportional, progressive, or regressive.