Microeconomics
13th Edition
ISBN: 9781337671590
Author: Arnold
Publisher: Cengage
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Chapter 15.1, Problem 3ST
To determine
Related to individual income.
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Keep in mind that you don’t have to die to have to pay inheritance and gift taxes under the current tax code. Anyone who gives a family member more than $11.5 million (as of 2020 indexed annually for inflation) is subject to the tax. Is that amount too high or too low, and why?
Suppose you borrow $1,000 from a bank at a fixed rate of interest (5%) for one year to finance your college education. Explain the redistribution of income that occurs if the rate of inflation that year is 7%. Was this loan advantageous to you or the bank?
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Note: Round your answers to 2 decimal places.
FIT
Social Security taxes
$
737.80
Medicare taxes
$
172.55
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