Consider an income-tax system that has four tax brackets. The following table shows the marginal tax rate that applies to the income in each tax bracket.
Earned Income Tax Rate in Bracket (%)
Up to $20,000 0%
$20,001-$40,000 15%
$40,001-$80,000 30%
$80,001 and higher 35%
1. Compute the average income-tax rate at income levels $10,000 and $20,000, and each increment of $10,000 up to $120,000.
2. Compute the marginal income-tax rate for each level of income in [1].
3. Is this tax system progressive? Explain.