Year 1 Tax Worksheet Income taxed at 30% Total Tax Paid Person Year 1 Income Income taxcd at 15% Amy $20,000 Betty $40,000 Charlic $60,000 Dimitry $80,000 Evelyn $100,000 Year 1 Total Tax Revenue=
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- Consider an economy with the following income distribution: each person in the bottom quartile of the income distribution earns $15,000; each person in the middle two quartiles earns $40,000; and each person in the top quartile of the income distribution earns $100,000.a. What is the Gini coefficient associated with this income distribution?b. Suppose the bottom quartile pays no taxes, the middle two quartiles pay 10 percent of its income in taxes, and the top quartile pays 28 percent of its income in taxes. Two-thirds of all tax money is redistributed equally to all citizens in the form of military defense, government pensions (social security), roads/highways, and so on. The remaining one-third of tax money is distributed entirely to the poorest quartile. What is the Gini coefficient associated with this redistribution plan?Would you consider this tax and redistribution plan to be a particularly aggressive income redistribution policy?Consider an economy with 4000 people and the following income distribution: each person in the bottom quartile of the income distribution earns $10 dollars per hour; each person in the 2nd quartiles earns $20 dollars per hour; each person in the 3rd quartiles earns $25 dollars per hour;and each person in the top quartile of the income distribution earns $45 dollars per hour. (2) Suppose the bottom quartile pays no taxes, the 2nd quartiles pay 10% its income in taxes, the 3rd pays 20% and the top quartile pays 40% of its income in taxes. 80% of all tax money is redistributed equally to all citizens in the form of military defense, government pensions (social security), roads/highways, etc. The remaining tax money is distributed entirely to the poorest quartile. What is the Gini coefficient associated with this redistribution plan?Suppose in Fiscalville there is no tax on the first $10,000 of income, but a 20 percent tax on earnings between $10,001 and $20,000 and a 30 percent tax on income between $20,001 and $30,000. Any income above $30,000 is taxed at 40 percent. If your income is $50,000, how much will you pay in taxes
- Suppose in Fiscalville there is no tax on the first $10,000 of income, but a 20 percent tax on earnings between $10,001 and $20,000 and a 30 percent tax on income between $20,001 and $30,000. Any income above $30,000 is taxed at 40 percent. If your income is $50,000. what is average tax rate ?Suppose in Fiscalville there is no tax on the first $10,000 of income, but a 20 percent tax on earnings between $10,001 and $20,000 and a 30 percent tax on income between $20,001 and $30,000. Any income above $30,000 is taxed at 40 percent. If your income is $50,000, how much will you pay in taxes? Determine your marginal and average tax rates. Is this a progressive tax? Explain.Suppose George made $20,000 last year and that he lives in the country of Harmony. The way Harmony levies income taxes, each citizen must pay 10 percent in taxes on their first $10,000 in earnings and then 50 percent in taxes on anything else they might earn. So given that George earned $20,000 last year, his marginal tax rate on the last dollar he earns will be __________ and his average tax rate for his entire income will be _________________. a. 50 percent; 50 percent. b. 50 percent; less than 50 percent. c. 10 percent; 50 percent. d. 10 percent; less than 50 percent.
- Thelma's current income is $100,000 and she currently pays $30,000 in income tax.w Any income she earns above $100,000 is taxed at 40 percent. Which following correctly calculates her tax burden? the her average tax rate is 30 percent her marginal tax rate is 40 percent her average tax rate is 40 percent her marginal tax rate is 30 percent.Suppose in Fiscalville there is no tax on the first $10,000 of income, but a 20 percent tax on earnings between $10,000 and $20,000 and a 30 percent tax on income between $20,000 and $30,000. Any income above $30,000 is taxed at 40 percent. If your income is $50,000, how much will you pay in taxes? Determine your marginal and average tax rates. Is this a progressive tax?Barry can work 3120 hours in a (non-leap) year. He has the opportunity to work for $20 per hour. With the income that he earns from working he purchases cans of soup at a price of $1 per can. He has no other income. Barry must pay taxes on the income that he earns. The first $15,000 that he earns is exempt from taxation. However, on every dollar that he earns above $15,000, he faces a marginal tax rate of 15% (so for every $1 that he earns above $15,000 he must pay the government $.15). a) Putting hours of leisure on the x-axis and cans of soup on the y-axis illustrate Barry’s budget set. Be sure to label (put the coordinates) on both intercepts and the “kink” point on the budget line. b) Barry is a typical American worker who works 2000 hours per year. What are Barry’s total tax payments? Illustrate an indifference curve through his best bundle in your diagram for part (a). The President’s Tax Reform Panel proposes to change the tax laws. First, the government should lower the level…
- 4.7) Consider a national income tax that is structured as follows: Income Marginal tax rate $0-$10,000 0% $10,001-- $60,000 5% $60,001and above 0% For each of the following workers determine his or her marginal and average tax rate d. Would you describe the tax system as proportional, regressive, or progressive? ExplainAssuming the tax cut of $245 billion, what is the total amount of taxes paid bythe families in the $200,000 and over income bracket before the tax cut? Whatis the total amount of taxes paid by families in the $20,000 to $30,000 incomebracket before the tax cut?Suppose the tax rate on the first $10,000 income is 0; 10 percent on the next $20,000; 20 percent on the next $20,000; 30 percent on the next $30,000; and 40 percent on any income over $80,000. Family A has income of $40,000 and Family B has income of $100,000. What is the marginal and average tax rate for each family? Family A: marginal20 percent; average10 percent; Family B: marginal40 percent; average23 percent.Family A: marginal20 percent; average20 percent; Family B: marginal40 percent; average40 percent.Family A: marginal20 percent; average15 percent; Family B: marginal40 percent; average20 percent.Family A: marginal10 percent; average10 percent; Family B: marginal30 percent; average30 percent.