Assume that income tax is levied at a standard rate of 30% on all income over £5000.

(a) Calculate the marginal and average tax rates at the following income levels:

            (i) £3000          (ii) £9,000

            (iii) £12,000     (iv) £20,000

(b) Is the tax progressive or regressive?

Suppose the tax structure is revised so that income over £5000 is taxed at 30% as before, but the rate increases to 50% for income over £10,000.

(c) Calculate the marginal and average tax rates as before (in part (a)).

(d) Is the tax more or less progressive than before?