consider-a-tax-system-where-income-up-to-40000-is-taxed-at-15-and-income-above-4

Question

Consider a tax system where income up to $40,000 is taxed at 15%, and income above $40,000 is taxed at 25%. How would this system affect someone earning $70,000 compared to someone earning $30,000?

Accepted Answer

The person earning $70,000 would pay a higher average tax rate.

Answer

The person earning $30,000 would pay a higher average tax rate.

Answer

Both individuals would pay the same average tax rate.

Answer

The tax system would not affect either individual's average tax rate.

Consider a tax system where income up to \$40,000 is taxed at 15%, and income above \$40,000 is taxed at 25%. How would this system affect someone earning \$70,000 compared to someone earning \$30,000?