Macroeconomics
13th Edition
ISBN: 9780134735696
Author: PARKIN, Michael
Publisher: Pearson,
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Chapter 19, Problem 20APA
To determine
Lower healthcare subsidies and the benefits to the rich.
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Sean is getting ready to do his taxes. He is single and lives in New York City. Sean earned $50,000 in 2011. He reviews the following table, which shows the IRS tax rates for a single taxpayer in 2011.
On Annual Taxable Income...
The Tax Rate Is...
(Percent)
Up to $8,500
10
From $8,500 to $34,500
15
From $34,500 to $83,600
25
From $83,600 to $174,400
28
From $174,400 to $379,150
33
Over $379,150
35
Based on the IRS table, Sean calculates that his marginal tax rate is ______ (10%, 15%, 25%, 28%, 33%, 35% ) when his annual income is $50,000.
Sean calculates that he owes ________ ($4,725, $4,750, $7,775, $8,625, $12,500) in income taxes for 2011.
Sean then calculates that his average tax rate is __________ ( 12%, 15%, 17%, 20%, 25%) , based on the annual income level and the amount of taxes he owes for 2011.
After figuring out what he owes in taxes in 2011, Sean decides to ask an accountant for tax advice. The accountant claims that he has found a legal way to…
please answer the following question:
1. Which of the following is an example of govemment discretionary spendingA) Social Security retirement paymentsB) defense spendingC) net interest paid on government debD) Medicare benefits for the elderly
Question 1
Assume no Washington income tax, and Washington has a $4M grant to spend. Zoe Wu tells the mayor that a means-tested program would allow the poor to get more money. She suggests that benefits should be redunced by $10 for each $100 in workers’ pre-tax income.
Suppose the guarantee rate is G. How much benefit would each group get at their original income (working 40 weeks) in terms of G?
2 2. With the $4M grant, how large can G be? How much benefit does each group get? What is the maximum income in the phase-out region?
Draw the benefit schedule with labels.
Suppose the government could identify workers’ type and sent them money equal to your answer in part (b), regardless of their labor supply choice.
(a) What is the percentage change in workers’ wealth, the dollar value of their time plus unearned income?
(b) How many weeks per year would each type work using the elasticity of η = −0.1? Compare your answer to 4(d). Explain why they are similar or…
Chapter 19 Solutions
Macroeconomics
Ch. 19.1 - Prob. 1RQCh. 19.1 - Prob. 2RQCh. 19.1 - Prob. 3RQCh. 19.1 - Prob. 4RQCh. 19.1 - Prob. 5RQCh. 19.2 - Prob. 1RQCh. 19.2 - Prob. 2RQCh. 19.2 - Prob. 3RQCh. 19.3 - Prob. 1RQCh. 19.3 - Prob. 2RQ
Ch. 19.3 - Prob. 3RQCh. 19.3 - Prob. 4RQCh. 19.3 - Prob. 5RQCh. 19.4 - Prob. 1RQCh. 19.4 - Prob. 2RQCh. 19.4 - Prob. 3RQCh. 19 - Prob. 1SPACh. 19 - Prob. 2SPACh. 19 - Prob. 3SPACh. 19 - Prob. 4SPACh. 19 - Prob. 5SPACh. 19 - Prob. 6SPACh. 19 - Use the following table to work Problems 7 and 8....Ch. 19 - Prob. 8SPACh. 19 - Prob. 9APACh. 19 - Prob. 10APACh. 19 - Prob. 11APACh. 19 - Prob. 12APACh. 19 - Prob. 13APACh. 19 - Prob. 14APACh. 19 - Prob. 15APACh. 19 - Prob. 16APACh. 19 - Prob. 17APACh. 19 - Prob. 18APACh. 19 - Prob. 19APACh. 19 - Prob. 20APACh. 19 - Prob. 21APACh. 19 - Prob. 22APACh. 19 - Prob. 23APA
Knowledge Booster
Similar questions
- Briefly explain the differences between TANF, the earned income tax credit, SNAP, and Medicaid.arrow_forwardIn 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.arrow_forwardQuestion: 2The government is interested in imposing a tax to generate revenue X. It is considering whether they should tax the consumer’s income or impose a tax on a commodity y. What should the government do if they do NOT care about consumer welfare? Use three graphs to illustrate your answer and explain those graphs in your answer.arrow_forward
- Most of the government's mandatory spending is used on which of the following? A) social security B) income security C) medicaid D) veteran's benefitsarrow_forward“The executive action is estimated to increase Supplemental Nutrition Assistance Program (SNAP) benefits, otherwise known as food stamps, for the 12 million families who rely on the aid most. The order would increase weekly benefits for a family of four by 15 or 20 per cent. An increase of benefits awarded through a school meals program for low-income families could also give a family of three children more than $100 in extra benefits every two months” (Hall, 2021). Discuss the impact of the Affordable Care Act (ACA) on the increase in SNAP benefits from low-income families in the United States.arrow_forwardExplain in your own words how you believe the Jamaican Government could use taxation to create equity between the rich and the poor in our economy. Your explanation should include practical examples of how this could be achieved. Include referencesarrow_forward
- You are working for a politician who worries that a new tax will cause more inequality. She shows you the following results. Explain to her what it tells us about the impact of the tax Wealth Gini before tax: 0.8 Wealth Gini after tax: 0.9 Income Gini before tax 0.5 Income Gini after tax 0.4 (Please solve whole question I will Rate your answer.)arrow_forwardThe government has introduced an excise duty of 10 percent on mealie meal. This essentially means the price of mealie meal, an essential item in most households, has increased by 10 percent. As the chief economist responsible for managing a social protection programme, you have been asked to make a proposal on how you can minimise the adverse effect of the excise duty on low income households. Using your knowledge of compensating or equivalent variation, show how you would ensure that these households are protected from such a measure. Would Lump sum taxes be better than unit (ad valorem or percentage) taxes in this context?arrow_forwardExplain the reason why Albert Einstein said, "The hardest thing to understand in the world is the income tax."(please do not copy answers on the internet, thank you)arrow_forward
- Madeline who has $1200 to spend, wants to buy a refrigerator. Refer to the following table and write an inequality that shows how much she can pay p for the refrigerator. table- States sales tax- 6.5%city sales tax- .25%arrow_forwardHow do governments use spending and taxation to reduce inequality How do governments use spending and taxation to reduce inequality and poverty in an economy? How do governments use spending and taxation to reduce inequalityarrow_forwardEconomics "In South Africa, the tax on insulin is between 10 and 20 percent. If you are rich and living in South Africa, this is not a problem, but if you are poor, then insulin becomes something that you cannot afford." Why do buyers care so much about a tax on insulin, a vital daily medicine for those with diabetes? a. Because the tax incidence is equal between the buyers and sellers b. Because buyers pay virtually the entire tax on insulin because the demand is almost perfectly inelastic c. Because more insulin can be provided to those in need d. Because sellers increase their profit when there is a taxarrow_forward
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