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Suppose taxes are levied in the following way: No individual pays any taxes on the first $10 000 of ...

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Suppose taxes are levied in the following way: No individual pays any taxes on the first $10 000 of ...

Suppose taxes are levied in the following way: No individual pays any taxes on the first $10 000 of their income; for every dollar earned above this amount, all individuals pay 20% in taxes. This income-tax system is

▸ progressive, because the average tax rate rises as income rises.

▸ proportional, because the average tax rate is constant for all income levels.

▸ regressive, because the average tax rate declines as income rises.

▸ indexed.

▸ an accurate description of the Canadian system.

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Microeconomics

Edition: 17^th

Author: Ragan

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