Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN: 9781305506725
Author: James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher: Cengage Learning
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Chapter 28, Problem 7CQ
To determine
Calculate implicit marginal tax rate.
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Barry can work 3120 hours in a (non-leap) year. He has the opportunity to work for $20 per hour. With the income that he earns from working he purchases cans of soup at a price of $1 per can. He has no other income. Barry must pay taxes on the income that he earns. The first $15,000 that he earns is exempt from taxation. However, on every dollar that he earns above $15,000, he faces a marginal tax rate of 15% (so for every $1 that he earns above $15,000 he must pay the government $.15).
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The President’s Tax Reform Panel proposes to change the tax laws. First, the government should lower the level…
Ann pays $3,850 in taxes on an income of $38,500. Therefore her proportional tax rate is undefined. taxes must be progressive in nature. marginal tax rate must be 10 percent. average tax rate must be 10 percent.
Laura earns a base salary of $50,000 as an event planner and is subject to the following hypothetical income ta is considering taking on an additional wedding that will increase her income by $5,000. In order for Laura to c worth her time, it must earn her $3,000 after taxes. Please round all answers to two decimal places. What is the marginal tax rate associated with taking on this wedding? Marginal tax rate: Income $0-$10,000 $10,001-$30,000 $30,001-$50,000 $50,001+ Average tax rate: 4 What is Laura's average tax rate if the extra wedding is accepted? ves R Given the information, will Laura undertake this extra wedding? 5 7 Tax rate 5% 10% 20% 50% B T 6 % 45 % 8 9
Chapter 28 Solutions
Economics: Private and Public Choice (MindTap Course List)
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