George and Thomas live in a society in which the first $10,000 of income is taxe

Question

George and Thomas live in a society in which the first $10,000 of income is taxed at a rate of 10% while any income above $10,000 is taxed at a rate of 20%. George's income is $5,000, while Thomas's income is $20,000. This tax system is because Progressive; while Thomas earns four times as much as George, he pays six times as much tax as George. Proportional: Thomas both earns four times as much as George and pays four times as much tax as George. Regressive; while Thomas earns four times as much as George, he pays only twice as much tax as George. Progressive; while Thomas earns four times as much as George, he pays eight times as much tax as George.

Explanation / Answer

Answer is Progressive. While Thomas Earns four times as much as George. He pays six times as much tax as George. Explanation: George Income 5000 Tax @10% 500 Thomas: Income 20000 Tax for firs10000 1000 Tax for next $10000 2000 Thomas tax liability 3000

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