Microeconomics,, 16th Canadian Edition

marginal tax rates for each level of income.
d. Is this tax system progressive? Explain.
11. The table below provides information about two individuals,
Michael and Lindsay. Assume the following:
Income tax brackets are the same as in Study Exercise 10.
All after-tax income is either saved or spent.
There is a sales tax of 7 percent on all goods and services.

Michael Lindsay

Annual pre-tax taxable income $35

000

$400

000

Percentage of after-tax income

saved

10% 40%

Income tax paid ($)

After-tax income

Sales tax paid ($)

Percentage of pre-tax income

paid in income tax