The table below shows an income tax schedule, expressed in nominal terms, for the year 2014. Taxes due (percent of income) 10 Family income ≤ $20,000 $20,001-$30,000 $30,001-$50,000 12 15 $50,001-$80,000 20 > $80,000 25 The legislature wants to ensure that families with a given real income are not pushed up into higher tax brackets by inflation. The CPI (times 100) is 178 in 2014 and 188 in 2016. Instructions: To calculate the adjusted income tax, enter the percentage rate of inflation rounded to one decimal place. Rate of inflation between 2014 and 2016: [ %. To meet the legislature's goal, the income tax schedule for the year 2016 should be adjusted as shown in the following table: Instructions: Use your rounded rate of inflation when calculating the income tax schedule in the table below. Enter your responses as whole numbers. $ $ Family income 5 $ > $ to $ to $ to Taxes due (percent of income) 10 12 15 20 25

The table below shows an income tax schedule, expressed in nominal terms, for the year 2014. Taxes due (percent of income) 10 Family income ≤ $20,000 $20,001-$30,000 $30,001-$50,000 12 15 $50,001-$80,000 20 > $80,000 25 The legislature wants to ensure that families with a given real income are not pushed up into higher tax brackets by inflation. The CPI (times 100) is 178 in 2014 and 188 in 2016. Instructions: To calculate the adjusted income tax, enter the percentage rate of inflation rounded to one decimal place. Rate of inflation between 2014 and 2016: [ %. To meet the legislature's goal, the income tax schedule for the year 2016 should be adjusted as shown in the following table: Instructions: Use your rounded rate of inflation when calculating the income tax schedule in the table below. Enter your responses as whole numbers. $ $ Family income 5 $ > $ to $ to $ to Taxes due (percent of income) 10 12 15 20 25

Economics For Today

10th Edition

ISBN:9781337613040

Author:Tucker

Publisher:Tucker

Chapter17: Inflation

Section: Chapter Questions

Problem 5SQ

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