With a lump-sum tax, the
A)marginal tax rate is always less than the average tax rate.
B)average tax rate is always less than the marginal tax rate.
C)marginal tax rate falls as income rises.
D)marginal tax rate rises as income rises.

Question

Quizplus · Accepted Answer

A lump-sum tax is a fixed amount, regardless of income level, so the marginal tax rate is zero, which is always less than the average tax rate.

With a Lump-Sum Tax, the