Exploring Economics
8th Edition
ISBN: 9781544336329
Author: Robert L. Sexton
Publisher: SAGE Publications, Inc
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Question
Chapter 17, Problem 11P
To determine
(a)
To compute:
The tax/refund for the given earnings.
To determine
(b)
To compute:
The tax/refund for the given earnings.
To determine
(c)
To compute:
The tax/refund for the given earnings.
To determine
(d)
To compute:
The tax/refund for the given earnings.
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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 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?
Provide the two benefits to the U.S. government of granting income tax credits.
Chapter 17 Solutions
Exploring Economics
Ch. 17 - Prob. 1PCh. 17 - Prob. 2PCh. 17 - Prob. 3PCh. 17 - Prob. 4PCh. 17 - Prob. 5PCh. 17 - Prob. 6PCh. 17 - Prob. 7PCh. 17 - Prob. 8PCh. 17 - Prob. 9PCh. 17 - Prob. 10P
Ch. 17 - Prob. 11PCh. 17 - Prob. 12PCh. 17 - Prob. 13PCh. 17 - Prob. 14PCh. 17 - Prob. 15PCh. 17 - Prob. 16PCh. 17 - Prob. 17PCh. 17 - Prob. 18PCh. 17 - Prob. 19PCh. 17 - Prob. 20PCh. 17 - Prob. 21PCh. 17 - Prob. 22PCh. 17 - Prob. 23PCh. 17 - Prob. 24PCh. 17 - Prob. 25PCh. 17 - Prob. 26PCh. 17 - Prob. 27PCh. 17 - Prob. 28P
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Similar questions
- 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.arrow_forwardSuppose 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 taxesarrow_forwardJana has the opportunity to buy the boat of her dreams but needs to determine the best way to fund the purchase. The cost of the boat is $22,000, and she’s considering taking on a second job at which she can earn this amount or selling some investments to generate the cash. However, she realizes that she will also have to pay taxes on any amount she receives. If Jana is in the 35 percent marginal tax bracket and earns $22,000 from a second job, by how much will her end-of-year tax liability increase? What if she elects to sell some investments that she’s held for several years at a gain of $22,000? How would your answer change if she had held the investments for just 6 months?arrow_forward
- What is a progressive income tax? How does this impact the distribution of (after-tax) income in the United States?arrow_forwardSong earns $148,000 taxable income as an interior designer and is taxed at an average rate of 20 percent (i.e., $29,600 of tax). Answer the questions below assuming that Congress increases the income tax rate such that Song's average tax rate increases from 20 percent to 25 percent. Required: What will happen to the government's tax revenues if Song chooses to spend more time pursuing her other passions besides work in response to the tax rate change and therefore earns only $111,000 in taxable income? What is the term that describes this type of reaction to a tax rate increase? What types of taxpayers are likely to respond in this manner?arrow_forward4. 1) Consider the following categories of taxes: I. wealth tax II. consumption tax III. Direct tax IV. Indirect tax Using the above categories only, an estate tax can be considered to be: a. III. only b. IV. only c. Both I. and III. d. Both I. and IV. e. Both II. and IV. 2) Which of the following is true of all social insurance programs? a. They are paid for by funds contributed only by employers. b. They are paid for by funds contributed only by employees. c. The initiation of payments depends on the occurrence of some kind of event in a person's life. d. Whether a person receives payments is contingent on the wealth and/or income of the covered person.arrow_forward
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