4. Computing and interpreting average tax rates In ahypothetical economy, Dmitri earns $35,000, Francesearns $70,000, and Jake earns $105,000 in annualincome. The following table shows the annual taxableincome and tax liability for these three singleindividuals. For example, Dmitri, who earns $35,000,owes $7,350 in taxes. Use the tax liability figuresprovided to complete the following table by computingthe average tax rate for Dmitri, Frances, and Jake withan annual income of $35,000, $70,000, and $105,000,respectively.

The average tax rate for Dmitri, Frances, and Jake, based on the provided tax liability figures, is…

Answered: 4. Computing and interpreting average…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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4. The Laffer curve Government-imposed taxes cause reductions in the activity that is being taxed, which has important implications for revenue collections. To understand the effect of such a tax, consider the monthly market for gin, which is shown on the following graph. Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly. PRICE (Dollars per bottle) 100 90 80 20 10 0 0 Supply Demand 14 28 42 56 70 84 98 112 126 140 QUANTITY (Bottles) Graph Input Tool At this tax amount, the equilibrium quantity of gin is Market for Gin Suppose the government imposes a $20-per-bottle tax on suppliers. Quantity (Bottles) Demand Price (Dollars per bottle) Tax (Dollars per bottle) 56 60.00 20.00 Supply Price (Dollars per bottle) bottles, and the government collects $ ? 40.00 in tax revenue.
1. George & Martha are married and file a joint income tax return. In 2017 the couple had $ 250,000 of total income and $ 200,000 in taxable income. a. Calculate George & Martha's Washington's 2017 federal income tax liability (USE THE 2017 tax rate schedule in appendix D in your book). b. What is George & Martha's marginal federal tax rate for 2017? c. What is the George & Martha's average tax rate for 2017? d. What is the George & Martha's effective tax rate for 2017?
6. The negative income tax Many economists believe that a more effective way to supplement the income of the poor is through a negative income tax. Under this scheme, everyone reports his or her income to the government; individuals and families earning a higher income will pay a tax based on that income, while low-income individuals and families receive a subsidy, or negative tax. Assume that the only qualification required to receive a tax credit is low income. Suppose the government uses the following equation to compute a family's tax liability: Taxes Owed = (1/4 of Income) – $6,000 For each of the incomes listed in the following table, determine the tax liability for a family with that income level. (Note: If a family receives a subsidy because its income is too low, be sure to indicate the tax liability as negative.) Income Tax Liability (Dollars per year) (Dollars per year) 12,000 24,000 60,000 True or False: If a family is currently receiving a tax credit, the credit is reduced…
12. In Taxland, the first $10,000 earned per year is exempt from taxation. Between $10,000.01 and $30,000, the tax rate is 25 percent. Between $30,000.01 and $50,000, it's 30 percent. Above $50,000, it's 35 percent. You're earning $80,000 a year. (LO18-4) a. How much in taxes will you have to pay? b. What is your average tax rate? c. What is your marginal tax rate?
24. Impact on Taxes. Lawrence has a marginal tax rate of 24%. He suddenly realizes that he neglected to include a $5,000 tax deduction. How will this oversight affect his taxes? =Lawrence paid $1200 excess tax because Lawrence neglected $ 5000 tax deduction 25. Impact on Taxes. From question 24, if Lawrence had forgotten a $5000 tax credit (instead of a $5000 tax deduction), how would his taxes be affected?
Discuss whether any of the following individuals are entitled to an office-in-home deduction: a. Maggie is a self-employed management consultant who maintains an office in her home exclusively used for client meetings and other business-related activities. Maggie has no other place of business and her office is the most significant place for her business. She has substantial income from the consulting practice. b. C. Marty is a college professor who writes research papers for academic journals in his office at home which is used exclusively for this purpose. Although Marty has an office at his place of employment, he finds it very convenient to maintain an office at home to avoid distractions from students and colleagues. Marty receives no income from the publication of the research articles for the year in question. Bobby operates his own sole proprietorship as an electrician. He maintains an office at home where he keeps his books, takes phone calls from customers, and does the…
In a hypothetical economy, Clancy earns $37,000, Eileen earns $74,000, and Hubert earns $111,000 in annual income. The following table shows the annual taxable income and tax liability for these three single individuals. For example, Clancy, who earns $37,000, owes $9,250 in taxes. Use the tax liability figures provided to complete the following table by computing the average tax rate for Clancy, Eileen, and Hubert with an annual income of $37,000, $74,000, and $111,000, respectively. Taxable Income Tax Liability Average Tax Rate Taxable Income (Dollars) (Dollars) (Percent) Clancy 37,000 9,250 Eileen 74,000 11,100 Hubert 111,000 11,100 The income tax system for this country is
Table 24.8 All Figures in Billions of Dollars Consumption Spending Income) Net Taxes (C=100 +0.9Yd) 2,350 2,530 2,710 2,890 3,070 3,250 3,430 Planned Investment Purchases 150 150 150 150 150 150 150 Output 2,600 2,800 3,000 3,200 3,400 3,600 3,800 100 100 100 100 100 100 100 Savings 150 170 190 210 230 250 270 Government Spending 200 200 200 200 200 200 200 le Refer to Table 24.8. The value of the tax multiplier is Lütfen birini seçin: O A. -5 O B. 10 OC -10 O D.-4 OE-9
Use the 2019 U.S. federal tax rates in the table to calculate answers to the questions below. Give all answers to two decimals. V Taxable Income $0-$9,700 $9,701-$39,475 $39,476-$84,200 $84,201-160,725 $160,726-$204,100 $204,101-$510,300 Over $510,300 1st attempt Tax rate 10% 222335 12 24 37 See Hin
5
12. Study Questions and Problems #12 Consider the first three columns of the following table, which outline a hypothetical Negative Income Tax plan. Complete the last column of the table. Family Income Negative Tax Positive Tax Total After-Tax Income $0 $10,000 $0 S 5,000 $7,500 0 S 10,000 $5,000 0 S 15,000 $2,500 0 S 20,000 0 0 S 25,000 0 -$2,500 S 30,000 -$5,000 S 35,000 -$7,500 S
Consider the first three columns of the following table, which outline a hypothetical Negative Income Tax plan. Complete the last column of the table. Family Income Negative Tax Positive Tax Total After-Tax Income 50 $20,000 50 S 5,000 $15,000 0 S 10,000 $10,000 S 15,000 $5,000 0 20,000 0 0 S 25,000 0 -$5,000 30,000 35,000 OO -$10,000 S -$15,000

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