A tax on labour income that does not eventually affect the number of labour hours supplied is non-distortionary. Do you agree or disagree with this statement. Explain
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A tax on labour income that does not eventually affect the number of labour hours supplied is non-distortionary. Do you agree or disagree with this statement. Explain
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- Assume you are an economist at Ministry of Economy. During the budget consultations, a participant suggested that the government should consider using income tax as a tool for improving productivity. The Principal Economic Planning Officer has directed you to provide him with the analysis of the impact of income tax changes on labour market. Using relevant diagram(s) illustrate and discuss the implications of changes in the income tax on labour market.The FICA (Federal Insurance Contribution Act) income cap is the point at which one’s income is no longer subject to the 6.2% social security tax that persons pay on their earnings. Under the current law, only the first $142,800 of earnings is taxed. After that, high earners no longer pay Social Security tax for the entire year. Presently the Nation's total personal income approaches $14 trillion. The Congressional Budget Office reports that 80% of all income earned in the Nation is earned above $142,800. 8A. What is meant by the term “Scrap the Cap.” 8B. If the Cap was “scrapped” and if 12.4 % of the income earned over $142,800 was taxed to fund Social Security, how much additional revenue would be generated annually for social security? 8C. Is Social Security really going bankrupt? Please do fast ASAP... fastWhat is the impact on the labour market due to a reduction in income tax rate? Select one: a. labour supply shifts to the left; wage rate increases and level of employment is lower a. labour supply shifts to the left; wage rate increases and level of employment is lower b. labour demand shifts to the right; wage rate increases and level of employment increases b. labour demand shifts to the right; wage rate increases and level of employment increases c. labour supply shifts to the right; wage rate decreases and level of employment is higher c. labour supply shifts to the right; wage rate decreases and level of employment is higher d. labour demand shifts to the left; wage rate decreases and level of employment decreases
- How does a tax on labor income influence the equilibrium quantity of employment? and How does the tax wedge influence potential GDP?Which type of income is composed of both the labour income and capital income of those person who provide both labour and capital services One wordSong earns $148,000 taxable income as an interior designer and is taxed at an average rate of 20 percent (i.e., $29,600 of tax). Answer the questions below assuming that Congress increases the income tax rate such that Song's average tax rate increases from 20 percent to 25 percent. Required: What will happen to the government's tax revenues if Song chooses to spend more time pursuing her other passions besides work in response to the tax rate change and therefore earns only $111,000 in taxable income? What is the term that describes this type of reaction to a tax rate increase? What types of taxpayers are likely to respond in this manner?
- Which of the following will most likely lead to a more equal distribution of income? a. More regressive national sales tax b. More progressive income taxes c. An increase in the high school dropout rate d. An increase in structural unemployment e. An increase in earnings for owners of capitalIn one of your lectures, you heard your teacher saying that the government of a country is usually a net demander of funds. You felt extremely disappointed to know this and wanted to tell your teacher that he may be incorrect in his assertion. After all, the government pays salaries to so many people in the public service. It also takes care of the citizens through numerous projects like roads, hospitals, schools, utilities like electricity and water and many more public welfare activities. In a way therefore, the government releases funds in billions of dollars so that the country can run efficiently and productively. In your opinion the government supplies more than it takes. Your teacher Dr. B appears to be an arrogant man and you would rather discuss this confusion with one of your classmates whom you are close with and whom you think has a natural aptitude towards economics and finance. His name is Gordon. Briefly narrate how Gordon would remove your confusion.Theo, a single taxpayer, actively participates in a rental real estate activity. During the year, his total rental real estate income was $25,000. His only other income for the year was $180,000 in wages. He does not have any adjustments to income, nor does he have any expenses allocable to investment income. How much of Theo's income is subject to the net investment income tax? $0 $5,000 $25,000 $205,000
- The government raises the income tax. What is the effect on the supply of labor, the demand for labor, equilibrium employment, the real wage rate, and potential GDP? The supply of labor _______ and the demand for labor _______. A. does not change; decreases B. decreases; does not change C. decreases; increases D. decreases; decreasesThomas is an employer with two employees, Patty and Selma. Patty’s wages are $12,450 and Selma’s wages are $1,275. The state unemployment tax rate is 5.4 per-cent. Calculate the following amounts for Thomas: a. FUTA tax before the state tax credit $__________________ b. State unemployment tax $____________________ c. FUTA tax after the state tax credit $________________Raka has 80 hours per week that she can allocate to work or leisure. Her job pays a wage rate of $20 per hour, but Raka is being taxed on her income in the following way. On the first $400 that she makes, she pays no tax. That is, for the first 20 hours she works, her net wage—what she takes home after taxes—is $20 per hour. On all income above $400, Raka pays a 75% tax. That is, for all hours above the first 20 hours, her net wage rate is only $5 per hour. Her indifference curves conform to the usual assumptions about consumer preferences. Raka’s optimal choice is to work 30 hours.Draw Raka’s time-allocation budget line for a typical week.