Question

1. which of the statements about the current u.s. tax system is true?

a. your friend tells you his marginal tax rate is 22%. that means that he pays 22% on all of his income.
b. everyone in the us who makes more than the minimum income requirement pays one flat tax rate.
c. our current system is described as a progressive system because it imposes higher rates on those who earn more.
d. our current system is described as a regressive system because it imposes higher rates on those who earn less.

Explanation:

• Option a: Marginal tax rate is the rate on the next dollar of income, not all income. So this is false.
• Option b: The US has a progressive tax system with multiple tax brackets, not a flat tax rate for all above minimum income. So this is false.
• Option c: A progressive tax system imposes higher tax rates on higher - income earners, which matches the description of the current US tax system. This is correct.
• Option d: A regressive tax system imposes higher effective tax rates on lower - income earners, which is not the case for the US tax system. So this is false.

Answer:

c. Our current system is described as a progressive system because it imposes higher rates on those who earn more.