Consider an income-tax system that has four tax brackets. The following table shows the marginal tax rate that applies to the income in each tax bracket.

Earned Income Tax Rate in Bracket (%)

Up to $20,000 0%

$20,001-$40,000 15%

$40,001-$80,000 30%

$80,001 and higher 35%

1. Compute the average income-tax rate at income levels $10,000 and $20,000, and each increment of $10,000 up to $120,000.

2. Compute the marginal income-tax rate for each level of income in [1].

3. Is this tax system progressive? Explain.