5. Computing the implicit marginal tax rate Suppose Amy is a single parent with one child, and she is trying to determine the effect of transfer benefits and taxes on her implicit marginal tax rate (and thus her incentive to work). The following table shows the transfer benefits and income taxes at various income levels in the economy in which Amy resides. Compute the spendable income level Amy would have at each level of earned income and enter these values in the last column of the table. Earned Income from Work Transfer Benefits Income and Employment Taxes (Dollars) (Dollars) (Dollars) 0 9,883 0 5,000 8,905 406 10,000 7,013 724 15,000 5,776 1,379 20,000 2,845 2,017 25,000 1,283 2,790 Spendable Income (Dollars) 9,883 If Amy's income from work increased from $10,000 to $15,000, her implicit marginal tax rate would be If Amy's income from work increased from $15,000 to $20,000, her implicit marginal tax rate would be

5. Computing the implicit marginal tax rate Suppose Amy is a single parent with one child, and she is trying to determine the effect of transfer benefits and taxes on her implicit marginal tax rate (and thus her incentive to work). The following table shows the transfer benefits and income taxes at various income levels in the economy in which Amy resides. Compute the spendable income level Amy would have at each level of earned income and enter these values in the last column of the table. Earned Income from Work Transfer Benefits Income and Employment Taxes (Dollars) (Dollars) (Dollars) 0 9,883 0 5,000 8,905 406 10,000 7,013 724 15,000 5,776 1,379 20,000 2,845 2,017 25,000 1,283 2,790 Spendable Income (Dollars) 9,883 If Amy's income from work increased from $10,000 to $15,000, her implicit marginal tax rate would be If Amy's income from work increased from $15,000 to $20,000, her implicit marginal tax rate would be

Microeconomics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506893

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter15: Income Inequality And Poverty

Section: Chapter Questions

Problem 7CQ

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2. Income taxes The following table shows income tax rates in Econoland. Annual Income Tax Rate Up to $50,000 10% From $50,001 to $75,000 20% Over $75,000 30% This is an example of a income tax. Kevin, a resident of Econoland, currently works 20 hours a week and earns an annual income of $50,000. After paying income taxes, Kevin receives per year. If Kevin works an additional 10 hours a week (30 hours a week total), his annual income will be $75,000. After paying income taxes, Kevin will receive per year. In other words, by working an additional 10 hours per week, Kevin will receive an additional more than what he would If Kevin works 10 more hours in a week (40 hours a week total), his annual income will further increase to $100,000. After paying income taxes, Kevin per year. In other words, by working 10 more hours per week, Kevin will receive receive if he works only 30 hours a week. will receive As Kevin works more, the additional amount he receives from working 10 more hours .…
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← → X VD C Calculate the income tax for a single person who has $81,396 of taxable income using the table below which shows the tax brackets for 2016 for single workers. TODE EQ Taxable Income $0 to $9,375 $9,376 to $37,550 $37,551 to $90,850 $90,851 to $189,500 $189,501 to $411,650 $411,651 to $414,500 $414,501 or more Answer to the nearest penny. Tax Rate 12% of amount over $0 $945 plus 16% of the amount over $9,375 $5,278 plus 26% of the amount over $37,550 $18,526 plus 29% of the amount over $90,850 $46,592 plus 34% of the amount over $189,500 $119,622 plus 36% of the amount over $411,650 $120,135 plus 40.2% of the amount over $414,500 hp
Thelma's current income is $100,000 and she currently pays $30,000 in income tax.w Any income she earns above $100,000 is taxed at 40 percent. Which following correctly calculates her tax burden? the her average tax rate is 30 percent her marginal tax rate is 40 percent her average tax rate is 40 percent her marginal tax rate is 30 percent.
Please help me fix e and f. Thanks!
The United States has established a progressive income tax system, where a worker’s tax rate onearnings increases as she earns more money. There are 168 hours in a given week. Assume thatfor the first 56 hours worked, the tax rate is t1, which means that the net real wage is w*(1-t1).After working the 56th hour, the worker jumps to a higher tax rate t2. After the 112th hourworked, the individual jumps to an even higher tax rate, t3.(a) During most election years, some politicians argue that a having a flat tax system isbetter. Assume that there is a proposal to institute a flat tax, where all workers pay a taxrate equal to t4, which is greater than t3. On the same set of axes, graph the budgetconstraints associated with the progressive tax system and the flat tax system. Make sureto label all of the slopes.(b) Would moving to this proposed flat tax system likely encourage more or fewer hoursworked for relatively high-wage workers? Make sure to explain your answer (a writtenexplanation…
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Consider an economy in which individuals choose between work time and leisure time. They spend all of their wages from work hours on consumption goods. Suppose that the government introduces an ad valorem tax of 45 percent imposed on all consumption goods and on leisure time. In the case of consumption, the tax applies to the expenditure amount. In the case of leisure time, the tax applies to the value of leisure time assessed at the individual's hourly wage from labour. What income tax rate is equivalent to this tax on consumption and leisure? [NOTE: If necessary, please round your answer to the nearest percent. Enter the whole number corresponding to the percentage rate. Do not enter the percent sign. For example, if your answer is 12 percent, you should enter 12 in the answer space, not 0.12.]
Two years ago, Adrienne and William earned $90,450 and paid $10,854 in income tax. Last year, the couple earned $97,770 and paid $15,632 In Income tax. a. Which of the following statements is true regarding the tax payments? O The actual tax payment was higher last year and the couple's disposable income was smaller. O Both the actual tax payment and the tax rate were higher last year than in the previous year. The actual tax payment was higher last year, but the tax rates were the same. O The actual tax payment was higher last year, but the tax rates cannot be computed without more Information. b. This example illustrates O the stabilizing properties of the U.S. tax system. O increased Income requires new tax policy to prevent Inflation. O households with higher income pay a smaller percentage of their Income in taxes. O taxes are too high.
When Ann's income increased from $100,000 to $120,000, her income tax payment increased from $22,000 to $30,000. Ann's average tax rate is and her marginal tax rate is A. 25 percent; 25 percent B. 40 percent; 25 percent C. 40 percent; 40 percent D. 25 percent; 40 percent