2 IncomeTax plan A Tax plan BTax plan Cbefore tax(dollars)(dollars)(dollars)(dollars)0003,00020,0002,0001,0003,00040,0005,0002,0003,00060,00010,0003,0003,00080,00020,0004,0003,000The government in the country of Zappoo is trying to decide which tax plan to implement. Thetable above shows three alternative plans. If the government decides to implement a progressiveincome tax, it will implement tax planB.OAO. C.A or B.

In a progressive tax structure is a tax structure in which the tax burden increases as taxable…

Income before tax (dollars) 0 20,000 40,000 60,000 80,000 Tax plan A (dollars) 0 2,000 5,000 10,000 20,000 Tax plan B (dollars) 0 1,000 2,000 3,000 4,000 Tax plan C (dollars) 3,000 3,000 3,000 3,000 3,000

Income before tax (dollars) 0 20,000 40,000 60,000 80,000 Tax plan A (dollars) 0 2,000 5,000 10,000 20,000 Tax plan B (dollars) 0 1,000 2,000 3,000 4,000 Tax plan C (dollars) 3,000 3,000 3,000 3,000 3,000

ECON MACRO

5th Edition

ISBN:9781337000529

Author:William A. McEachern

Publisher:William A. McEachern

Chapter3: Economic Decision Makers

Section: Chapter Questions

Problem 3.11P

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Question

Income
Tax plan A Tax plan B
Tax plan C
before tax
(dollars)
(dollars)
(dollars)
(dollars)
0
0
0
3,000
20,000
2,000
1,000
3,000
40,000
5,000
2,000
3,000
60,000
10,000
3,000
3,000
80,000
20,000
4,000
3,000
The government in the country of Zappoo is trying to decide which tax plan to implement. The
table above shows three alternative plans. If the government decides to implement a progressive
income tax, it will implement tax plan
B.
OA
O. C.
A or B.

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