Economics Plus MyLab Economics with Pearson eText (2-semester Access) -- Access Card Package (6th Edition) (The Pearson Series in Economics)
6th Edition
ISBN: 9780134417295
Author: R. Glenn Hubbard, Anthony Patrick O'Brien
Publisher: PEARSON
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Question
Chapter 18, Problem 18.1.9PA
To determine
Why it is politically difficult to eliminate tax preferences for some groups in order to improve the tax code efficiency by reducing general tax rates.
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Students have asked these similar questions
In 1989, Senator Bob Packwood asked Congress’s Joint Committee on Taxation how much extra revenue the government would raise if it just started taxing 100% of all income over $200,000 per year. The Joint Committee crunched some numbers and reported an answer: $204 billion per year.
a. What is wrong with this answer?
In 1989, very few people made over $200,000 a year, so the estimate of the tax revenue is far too high.
Increasing government spending by $204 billion each year would have generated economic growth, and subsequently even higher amounts of tax revenues.
The Joint Committee on Taxation did not have the tools needed to make such an estimate accurately.
No one would have an incentive to work once they had earned $200,000, so much of the taxable income would disappear.
Write the summary of following paragraph.
Tax Treaty
A tax treaty is an agreement between two or more countries by dividing the right to impose a tax on income derived from a state sourced by a resident or resident of another country. The purpose of this tax treaty is to avoid the imposition of double taxation and various tax evasion efforts arising from transactions between the two countries.
One of the tax treaties that will be discussed is the Indonesian tax treaty with Singapore which was signed on May 8, 1990. The avoidance of double taxation on the tax object is as follows:
• Immovable property, income from immovable property under Indonesian-
Singapore tax treaty is taxable only from the country in which the immovable property is situated even though the owner of the immovable object is not a national of that State.
• The operating profit earned by a business entity in a country under this agreement may only be imposed by the country of which the enterprise is domiciled, but…
Suppose that Carson earns $80,000 per year. Now suppose that he must pay income taxes according to the tax schedule shown
below.
Income
$0 to $7,000
$7,001 to $40,000
$40,001 to $75,000
$75,001 to $142,000
Over $142,000
Instructions: Enter your answers rounded to the nearest whole number
a. According to the table, what type of income tax does Carson face?
(Click to select)
b. Assume that Carson has no tax exemptions or deductions. How much in income taxes must Carson pay?
$
What is Carson's marginal tax rate?
percent
Tax Rate (%)
15
15
15
15
15
What is his average tax rate?
percent
A
Chapter 18 Solutions
Economics Plus MyLab Economics with Pearson eText (2-semester Access) -- Access Card Package (6th Edition) (The Pearson Series in Economics)
Ch. 18 - Prob. 18.1.1RQCh. 18 - Prob. 18.1.2RQCh. 18 - Prob. 18.1.3RQCh. 18 - Prob. 18.1.4RQCh. 18 - Prob. 18.1.5PACh. 18 - Prob. 18.1.6PACh. 18 - Prob. 18.1.7PACh. 18 - Prob. 18.1.8PACh. 18 - Prob. 18.1.9PACh. 18 - Prob. 18.1.10PA
Ch. 18 - Prob. 18.1.11PACh. 18 - Prob. 18.1.12PACh. 18 - Prob. 18.2.1RQCh. 18 - Prob. 18.2.2RQCh. 18 - Prob. 18.2.3RQCh. 18 - Prob. 18.2.4RQCh. 18 - Prob. 18.2.5PACh. 18 - Prob. 18.2.6PACh. 18 - Prob. 18.2.7PACh. 18 - Prob. 18.2.8PACh. 18 - Prob. 18.2.9PACh. 18 - Prob. 18.2.10PACh. 18 - Prob. 18.2.11PACh. 18 - Prob. 18.2.12PACh. 18 - Prob. 18.2.13PACh. 18 - Prob. 18.3.1RQCh. 18 - Prob. 18.3.2RQCh. 18 - Prob. 18.3.3PACh. 18 - Prob. 18.3.4PACh. 18 - Prob. 18.3.5PACh. 18 - Prob. 18.3.6PACh. 18 - Prob. 18.3.7PACh. 18 - Prob. 18.3.8PACh. 18 - Prob. 18.3.9PACh. 18 - Prob. 18.3.10PACh. 18 - Prob. 18.3.11PACh. 18 - Prob. 18.4.1RQCh. 18 - Prob. 18.4.2RQCh. 18 - Prob. 18.4.3RQCh. 18 - Prob. 18.4.4RQCh. 18 - Prob. 18.4.5RQCh. 18 - Prob. 18.4.6PACh. 18 - Prob. 18.4.7PACh. 18 - Prob. 18.4.8PACh. 18 - Prob. 18.4.9PACh. 18 - Prob. 18.4.10PACh. 18 - Prob. 18.4.11PACh. 18 - Prob. 18.4.12PACh. 18 - Prob. 18.4.13PACh. 18 - Prob. 18.4.14PACh. 18 - Prob. 18.4.15PA
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