Microeconomics
11th Edition
ISBN: 9781260507140
Author: David C. Colander
Publisher: McGraw Hill Education
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Question
Chapter 18, Problem 1QAP
(a)
To determine
The transfer cost of upper quintiles.
(b)
To determine
The discretionary income that the top 20 percent should invest to change the situation.
(c)
To determine
The discretionary income that the bottom 20 percent should have to prevent the change.
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To combat income inequality and to generate increased tax revenues to fund expenditures, government officials decide to aggressively increase how progressive income taxes are, so much so that the top income earners are marginally taxed 90% of their income (and while this marginal tax rate may seem oppressive, these top income earners still have more than enough income to satisfy all of their needs and all but the most extravagant of wants - basically, these earners have more than enough money).
Argue why this tax policy is a fair approach to fund government expenditures.
Why might this tax policy fail to achieve its objectives (tax revenues would actually decline as a result)?
True or False (and explain your answer) :
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As evidence, they pointed out that most Americans (92 million) would receive an average tax reduction of over $1000.
The median tax cut was less than $100.
Based on this information, we can conclude that most Americans got a tax cut around $1000.
Answer asap.
Will rate positively for correct explanation!
Case Study: Inequality, Poverty and WealthA study reported in 2001 discovered that relatively poor people give more generously to charitythan those with greater wealth. The project, entitled “The Widow’s Might: How CharitiesDepend on the Poor”, was conducted by Beth Egan of the Social Market Foundation, whoexamined the contributions of over 1000 individuals to ten British charities. It was found thatalthough richer people gave more money in absolute terms, this comprised a smallerproportion of their overall income than was the case for the poor: in other words, the lower aperson’s income, the more of their earnings they donated to charity. For example, those withan annual income of under £5000 gave away an average of 4.5% in donations, whereas forthose with salaries of over £40,000, the figure was only 2%. The journalist Lucy Ward suggeststhat this challenges the assumption most of us hold that charities redistribute income from therich to the poor: instead, it would seem that…
Chapter 18 Solutions
Microeconomics
Ch. 18.1 - Prob. 1QCh. 18.1 - Prob. 2QCh. 18.1 - Prob. 3QCh. 18.1 - Prob. 4QCh. 18.1 - Prob. 5QCh. 18.1 - Prob. 6QCh. 18.1 - Prob. 7QCh. 18.1 - Prob. 8QCh. 18.1 - Prob. 9QCh. 18.1 - Prob. 10Q
Ch. 18 - Prob. 1QECh. 18 - Prob. 2QECh. 18 - Prob. 3QECh. 18 - Prob. 4QECh. 18 - Prob. 5QECh. 18 - Prob. 6QECh. 18 - Prob. 7QECh. 18 - Prob. 8QECh. 18 - Prob. 9QECh. 18 - Prob. 10QECh. 18 - Prob. 11QECh. 18 - Prob. 12QECh. 18 - Prob. 13QECh. 18 - Prob. 1QAPCh. 18 - Prob. 2QAPCh. 18 - Prob. 3QAPCh. 18 - Prob. 4QAPCh. 18 - Prob. 5QAPCh. 18 - Prob. 1IPCh. 18 - Prob. 2IPCh. 18 - Prob. 3IPCh. 18 - Prob. 4IPCh. 18 - Prob. 5IPCh. 18 - Prob. 6IPCh. 18 - Prob. 7IPCh. 18 - Prob. 8IPCh. 18 - Prob. 9IP
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