If someone told you that the marginal and average tax rates both increase each time taxable income increases, would you agree? If you disagree, what is the reason?
a) I agree.
b) I disagree because marginal tax rates increase and decrease as taxable income increases; average tax rate increases consistently as taxable income increases.
c) I disagree because average tax rates increase and decrease as taxable income increases; marginal tax rate increases consistently as taxable income increases.
d) I disagree because both tax rates increase and decrease as taxable income increases.