As part of Budget 2018, the Government of Canada introduced the Canada Workers Benefit (CWB) that will take affect starting on January 1, 2019. The CWB is a tax credit that supplements the earnings of low-income workers. For a single individual with no children, the structure of the CWB in 2023 is as follows. • No credit for earnings less than or equal to $3,000 • A 27% credit on each dollar of income earned over $3,000 up to a maximum of $1,428 • The maximum credit is reduced by 15% for each dollar eared above $23,495 Based on these parameters, please answer the following. (a) What is the "phase in" region for the CWB? In other words, what is the income range over which workers receive an increasing CWB subsidy? You may answer using a graph, an equation or using words. If you choose to characterize the phase-in region using words, then your answer must be very precise. (b) What is the "break even" level of earnings above which a single worker no longer receives a CWB subsidy?

As part of Budget 2018, the Government of Canada introduced the Canada Workers Benefit (CWB) that will take affect starting on January 1, 2019. The CWB is a tax credit that supplements the earnings of low-income workers. For a single individual with no children, the structure of the CWB in 2023 is as follows. • No credit for earnings less than or equal to $3,000 • A 27% credit on each dollar of income earned over $3,000 up to a maximum of $1,428 • The maximum credit is reduced by 15% for each dollar eared above $23,495 Based on these parameters, please answer the following. (a) What is the "phase in" region for the CWB? In other words, what is the income range over which workers receive an increasing CWB subsidy? You may answer using a graph, an equation or using words. If you choose to characterize the phase-in region using words, then your answer must be very precise. (b) What is the "break even" level of earnings above which a single worker no longer receives a CWB subsidy?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Jana has the opportunity to buy the boat of her dreams but needs to determine the best way to fund the purchase. The cost of the boat is $22,000, and she’s considering taking on a second job at which she can earn this amount or selling some investments to generate the cash. However, she realizes that she will also have to pay taxes on any amount she receives. If Jana is in the 35 percent marginal tax bracket and earns $22,000 from a second job, by how much will her end-of-year tax liability increase? What if she elects to sell some investments that she’s held for several years at a gain of $22,000? How would your answer change if she had held the investments for just 6 months?
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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.
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President Clinton has seized the cigarette excise tax as an expedient and politically correct means of increaseing federal revenue. In 1994 the federal government took in $12 billion from the present 24-cents-per-pack tax. If the tax were quadrupled to $1 a pack, Clinton figures tax revenues would increase by more than $50 billion over three years. Those added revenues would help finance the heath care reforms the president so dearly wants. Professor Gary Becker, a Nobel Prize-winning economist at the University of Chicago,says Clinton math is wrong. The White House assumed that cigarettes sales would drop by 4 percent for every 10 percent increase in prices, not the full adjustment of smokers' behavior. Over a three-year period, cigarette consumption is likely to decline by 8 percent for every 10 percent increase in price-twice as much as Clinton assumed.As a result,the $1-a-pack tax will bring in much less revenue than President Clinton projected. According to Professor Becker, by…
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