Economics of Macro Issues 7th Edition by Roger LeRoy Miller,Daniel Benjamin

Exercise 1

Suppose that on the first $10,000 of income people must pay 10 percent of their income in taxes. Also suppose that for the next $10,000 in income, they must pay 20 percent in taxes, and for the next $10,000, they must pay 30 percent in taxes. Compute the average and marginal tax rates for each of three people who earn (respectively) $5,000, $15,000, or $25,000.