Explanation The concept of ‘equal pay for the equal work’ later extended to equal after-tax pay for equal work. That means, two individuals who do the same works should earn the same income after the tax deduction, although it is not possible in the presence of a progressive tax structure. It is explained using the following example: Two individuals A and B where A earns $30,000 and B earns $40,000, and the tax rates are 20% and 30%, respectively. Suppose each drives a car on Christmas night, and each earns $500 for the night. The notable thing is according to the ‘equal after-tax pay for equal work’ concept, A and B has to receive equal pay...

13th Edition

ISBN: 9781337617383

Author: Roger A. Arnold

Publisher: Cengage Learning

See similar textbooks

Question

Chapter 11, Problem 7QP

To determine

Compare the progressive tax system and the ‘equal after-tax pay for equal work’.

Expert Solution & Answer

Chapter 11 Solutions

Economics (MindTap Course List)

Ch. 11.1 - Prob. 1ST Ch. 11.1 - Prob. 2ST Ch. 11.1 - Prob. 3ST Ch. 11.1 - Prob. 4ST Ch. 11.3 - Prob. 1ST Ch. 11.3 - Prob. 2ST Ch. 11.3 - Prob. 3ST Ch. 11.4 - Prob. 1ST Ch. 11.4 - Prob. 2ST Ch. 11 - Prob. 1QP

Knowledge Booster

Recommended textbooks for you

Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning
Macroeconomics
Economics
ISBN:9781337617390
Author:Roger A. Arnold
Publisher:Cengage Learning
Survey Of Economics
Economics
ISBN:9781337111522
Author:Tucker, Irvin B.
Publisher:Cengage,
Economics For Today
Economics
ISBN:9781337613040
Author:Tucker
Publisher:Cengage Learning
MACROECONOMICS FOR TODAY
Economics
ISBN:9781337613057
Author:Tucker
Publisher:CENGAGE L
Exploring Economics
Economics
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:SAGE Publications, Inc