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02. Referring to Fig 2d and the attached table, determine whether average pre-tax income of the top 10%, top 5%, top 1% of households by income has increased or decreased following the major tax cut years of 1982, 1987, and 2002-03.     Increased     decreased

02. Referring to Fig 2d and the attached table, determine whether average pre-tax income of the top 10%, top 5%, top 1% of households by income has increased or decreased following the major tax cut years of 1982, 1987, and 2002-03.     Increased     decreased

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
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02. Referring to Fig 2d and the attached table, determine whether average pre-tax income of the top 10%, top 5%, top 1% of households by income has increased or decreased following the major tax cut years of 1982, 1987, and 2002-03.
   
Increased
   
decreased
Fig 2d. Avg pre-tax income & Avg federal tax payments by income class; Tax changes & Recessions Sources: NBER, Tax Found., CBO. (Avg federal tax payments = avg. pre-tax income - avg after-tax income) recession years 2000 600 Imajor tax cuts 1800 Itax increases 500 1600 -avg. pretax income of Top 1% --avg. pretax income of Top 5% 1400 400 -avg. pretax income of Top 10% 1200 -avg. pretax income of Highest Quintile 1000 300 -avg. pretax income of All Quintiles -Avg. federal taxes paid by Top 1% 800 Avg. federal taxes paid by Top 5% 200 600 Avg. federal taxes paid by Top 10% Avg. federal taxes paid by Highest Quintile 400 100 -Avg. federal taxes paid by All Quintiles 200 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 recession years 2000 2000 | 2000 2000 2000 2000 2000 major tax cuts 2000 2000 2000 2000 2000 2000 2000 tax increases 2000 2000 avg. pretax income of Top 1% 550.0 518.5 514.9 537.1 588.0 647.3 695.1 904.8 731.4 921.1 857.2 822.6 741.5 840.9 807.9 833.0 918.1 1012.6 1161.2 1304.3 1419.6 1551.3 1227.8 1087.6|1160.7| 1380.0|1660.4 1790.8 1873.0 avg. pretax income 5% 248.8 236.9 232.7 238.0 250.6 274.7 285.9 344.3 305.2 346.6 338.2 324.5 304.7 330.3 323.8 334.3 358.7 384.4 423.7 461.9 492.3 522.4 444.3 406.9 430.4 485.8 555.5 582.4 611.2 182.8 176.7 174.5 176.1 184.4 199.7 206.4 238.6 220.0 241.6 239.0 230.5 220.1 233.0 231.4 237.6 249.8 267.0 287.5 308.5 328.4 344.4 303.1 283.7 295.9 327.0 362.0 377.7 394.5 avg. pretax income of Top 10% avg. pretax income of Highest Quintile 140.3 135.7 134.7 134.7 139.2 148.9 152.9 172.5 162.5 174.8 173.9 168.8 162.9 170.1 170.2 173.6 181.8 190.9 202.3 214.7 227.5 236.5 213.9 203.3 210.1 227.8 246.7 256.0 264.7 avg. pretax income of All Quintiles 63.4 61.3 | 61.1 60.9 | 61.3 64.0 65.6| 70.4 68.0 71.0 71.6 70.8 69.0 | 70.8 | 71.1| 72.0 74.7 77.2 80.3 84.2 87.8 89.2 | 84.2 | 80.6 81.8 86.3 90.5 93.3 96.0 Avg. federal taxes paid by Top 1% 203.4 179.3 163.8 148.5 163.2 182.8 187.7 230.7 228.2 273.4 247.5 236.6 221.4 257.2 278.5 297.9 331.7 364.5 405.5 436.1 475.8 512.6 403.3 357.1 367.8 433.1 524.5 559.9 553.3 Avg. federal taxes paid by Top 5% 79.2 72.9 68.4 62.0 64.1 71.6 72.6 84.8 87.0 96.2 91.9 | 87.7 84.2 92.8 98.7 104.8 114.1 123.1 134.0 142.3 153.4 161.8 133.2 120.2 122.8 139.4 162.3 169.5 170.7 Avg. federal taxes paid by Top 10% 54.1 51.3 49.2 | 44,5 45,7 50.4 51.1| 57.9 59.9 64.5 62.7 60,3 58.4 62.6 66.2 69.8 74.5 80.3 85.9 90,4 97.5 101.8 86.3 79.1 79.5 88.6 99.9 104.2 105.2 Avg. federal taxes paid by Highest Quintile 38.6 37.0 | 36.2 | 32.8 33.2 36.1 36.7 41.0 41.9 44.8 43.9 42.4 41.3 43.5 45.6 47.5 50.6 53.5 56.6 59.3 63.7 66.2 | 57.1 52.9 52.4 57.5 63.5 66.1| 66.4 Avg. federal taxes paid by All Quintiles 14.1 13.6 13.7 12.6 12.5 13.4 13.7 14.7 14.7 15.5 15.4 15.2 14.8 15.2 15.7 16.0 16.8 17.6 18.4 19.0 20.1 20.5 18.0 16.7 16.2 17.3 18.6 19.3 19.6 avg. pre-tax income in thousands of $ avg. tax payments in thousands of $
Transcribed Image Text:Fig 2d. Avg pre-tax income & Avg federal tax payments by income class; Tax changes & Recessions Sources: NBER, Tax Found., CBO. (Avg federal tax payments = avg. pre-tax income - avg after-tax income) recession years 2000 600 Imajor tax cuts 1800 Itax increases 500 1600 -avg. pretax income of Top 1% --avg. pretax income of Top 5% 1400 400 -avg. pretax income of Top 10% 1200 -avg. pretax income of Highest Quintile 1000 300 -avg. pretax income of All Quintiles -Avg. federal taxes paid by Top 1% 800 Avg. federal taxes paid by Top 5% 200 600 Avg. federal taxes paid by Top 10% Avg. federal taxes paid by Highest Quintile 400 100 -Avg. federal taxes paid by All Quintiles 200 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 recession years 2000 2000 | 2000 2000 2000 2000 2000 major tax cuts 2000 2000 2000 2000 2000 2000 2000 tax increases 2000 2000 avg. pretax income of Top 1% 550.0 518.5 514.9 537.1 588.0 647.3 695.1 904.8 731.4 921.1 857.2 822.6 741.5 840.9 807.9 833.0 918.1 1012.6 1161.2 1304.3 1419.6 1551.3 1227.8 1087.6|1160.7| 1380.0|1660.4 1790.8 1873.0 avg. pretax income 5% 248.8 236.9 232.7 238.0 250.6 274.7 285.9 344.3 305.2 346.6 338.2 324.5 304.7 330.3 323.8 334.3 358.7 384.4 423.7 461.9 492.3 522.4 444.3 406.9 430.4 485.8 555.5 582.4 611.2 182.8 176.7 174.5 176.1 184.4 199.7 206.4 238.6 220.0 241.6 239.0 230.5 220.1 233.0 231.4 237.6 249.8 267.0 287.5 308.5 328.4 344.4 303.1 283.7 295.9 327.0 362.0 377.7 394.5 avg. pretax income of Top 10% avg. pretax income of Highest Quintile 140.3 135.7 134.7 134.7 139.2 148.9 152.9 172.5 162.5 174.8 173.9 168.8 162.9 170.1 170.2 173.6 181.8 190.9 202.3 214.7 227.5 236.5 213.9 203.3 210.1 227.8 246.7 256.0 264.7 avg. pretax income of All Quintiles 63.4 61.3 | 61.1 60.9 | 61.3 64.0 65.6| 70.4 68.0 71.0 71.6 70.8 69.0 | 70.8 | 71.1| 72.0 74.7 77.2 80.3 84.2 87.8 89.2 | 84.2 | 80.6 81.8 86.3 90.5 93.3 96.0 Avg. federal taxes paid by Top 1% 203.4 179.3 163.8 148.5 163.2 182.8 187.7 230.7 228.2 273.4 247.5 236.6 221.4 257.2 278.5 297.9 331.7 364.5 405.5 436.1 475.8 512.6 403.3 357.1 367.8 433.1 524.5 559.9 553.3 Avg. federal taxes paid by Top 5% 79.2 72.9 68.4 62.0 64.1 71.6 72.6 84.8 87.0 96.2 91.9 | 87.7 84.2 92.8 98.7 104.8 114.1 123.1 134.0 142.3 153.4 161.8 133.2 120.2 122.8 139.4 162.3 169.5 170.7 Avg. federal taxes paid by Top 10% 54.1 51.3 49.2 | 44,5 45,7 50.4 51.1| 57.9 59.9 64.5 62.7 60,3 58.4 62.6 66.2 69.8 74.5 80.3 85.9 90,4 97.5 101.8 86.3 79.1 79.5 88.6 99.9 104.2 105.2 Avg. federal taxes paid by Highest Quintile 38.6 37.0 | 36.2 | 32.8 33.2 36.1 36.7 41.0 41.9 44.8 43.9 42.4 41.3 43.5 45.6 47.5 50.6 53.5 56.6 59.3 63.7 66.2 | 57.1 52.9 52.4 57.5 63.5 66.1| 66.4 Avg. federal taxes paid by All Quintiles 14.1 13.6 13.7 12.6 12.5 13.4 13.7 14.7 14.7 15.5 15.4 15.2 14.8 15.2 15.7 16.0 16.8 17.6 18.4 19.0 20.1 20.5 18.0 16.7 16.2 17.3 18.6 19.3 19.6 avg. pre-tax income in thousands of $ avg. tax payments in thousands of $
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