Question

What are the three different tax rates that are useful in assessing different tax rate structures, tax planning alternatives, and/or the tax burden of a taxpayer?

Option 1: Federal, State, Local
Option 2: Progressive, Regressive, Proportional
Option 3: Marginal, Effective, Average
Option 4: Sales, Excise, Property

Answer 1

The three different tax rates that are useful in assessing different tax rate structures, tax planning alternatives, and/or the tax burden of a taxpayer are progressive, regressive, and proportional taxes.

Step-by-step explanation:

The three different tax rates that are useful in assessing different tax rate structures, tax planning alternatives, and/or the tax burden of a taxpayer are:

1. Progressive: In a progressive tax system, the tax rate increases as income increases. This means that individuals with higher incomes pay a greater percentage of their income in taxes compared to those with lower incomes. For example, the federal income tax in the United States is a progressive tax.
2. Regressive: In a regressive tax system, the tax rate decreases as income increases. This means that individuals with lower incomes pay a greater percentage of their income in taxes compared to those with higher incomes. An example of a regressive tax is a sales tax.
3. Proportional: In a proportional tax system, also known as a flat tax, the tax rate is the same for everyone regardless of income. This means that individuals with higher incomes pay the same percentage of their income in taxes as those with lower incomes. An example of a proportional tax is a property tax.