How does a "progressive tax system" differ from a"regressive tax system" in terms of incomedistribution?A) A progressive tax system imposes higher tax rateson higher incomes, while a regressive tax systemimposes higher tax rates on lower incomes.B) A progressive tax system imposes a uniform taxrate on all incomes, while a regressive tax systemadjusts rates based on economic cycles.C) A progressive tax system reduces incomeinequality by taxing higher incomes at higher rates,while a regressive tax system can increase inequalityby placing a heavier burden on lower incomes.D) A progressive tax system exempts lower incomesfrom taxation, while a regressive tax system taxes allincomes at the same rate.

The goal of a progressive tax system is to reduce income inequality by taxing higher earners at…

Answered: How does a "progressive tax system"…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Which of the following government programs are financed by payroll tax? a) Medicare, food stamps, and social security. b) Medicaid, disability insurance, and Medicare. c) Disability, social security, and food stamps. d) Social security, disability, and Medicaid.
The Malaysian government plays a crucial role to ensure fair distribution of income and wealth in society through the implementation of tax-transfer schemes and social safety net programs. Are these fiscal instruments sufficient to address the issue of fair distribution? What constitutes fair distribution?
Under a proportional or flat tax, X O everyone pays the same dollar amount in income taxes O everyone pays the same tax rate O tax rates are assessed at a constant percentage of government spending O an individual's tax is based on his percentage of income versus total national income Question 4 Which of the following best describes a progressive tax policy? O People with higher incomes will pay more in taxes than people with higher incomes. O People with lower incomes will pay more in taxes than people with higher incomes. O People with higher incomes will pay a higher tax rate than people with lower incomes. O People with lower incomes will pay a higher tax rate than people with higher incomes
Suppose that the Philippine tax schedule given below is being implemented this year. (sorry, disregard the box) Tax Payment P 1,000 4,500 14,000 Annual Income P10,000 30,000 70,000 140,000 250,000 500,000 35,000 75,000 160,000
Reagan campaigned for a phased 30 percent tax cut within the next three years in officeMost of the tax cuts focused on the lower -income and poverty levels . True or False?
Let's walk through the median voter theorem in a little more detail. Consider a town with three voters, Enrique, Nandini, and Torsten. The big issue in the upcoming election is how high the sales tax rate should be. As you'll learn in macroeconomics (and in real life), on average, a government that wants to do more spending has to bring in more taxes, so "higher permanent taxes" is the same as "higher government spending." Enrique wants low taxes and small government, Nandini is in the middle, and Torsten wants the biggest town government of the three. Each one is a stubborn person, and his or her favorite position-what economic theorists call the "ideal point-never changes in this problem. Their preferences can be summed up like this, with the x denoting each person's favorite tax rate: Enrique 0% N O Sales tax rate Nandini P Torsten 20% Suppose there are two politicians running for office, N and O (so ignore P for now). Enrique will vote for Choose your answer. Nandini will vote for…
In the classical budgeting era from WWII to the early 70s, most citizens agreed on public policy and where to spend tax dollars? True or False
40. The most efficient tax system has a broad tax base and a low tax rate. A) True B) False 41. Making the income tax more progressive by adding more tax brackets potentially can result in A) stronger economic growth B) a more "equitable" tax C) no effect on equity or economic growth D) slower economic growth 42. The Atlanta city council decides to double taxes on small business in the downtown area to raise more tax revenue to fund more social programs. From an economic growth perspective, why is this a misguided economic policy? A) it is not a bad policy; doubling taxes will automatically double tax revenue B) excessive taxes on business can result in reduced jobs, incomes and business creation because business simply moves to a new government jurisdiction. C) it is not a bad policy; raising taxes will double tax revenue, raise income levels, and encourage business creation. D) excessive taxes will provide more social benefits, so business will tolerate unusually high taxes and stay…
The concept that people should pay taxes based on the benefits they receive from government services is called Group of answer choices the ability-to-pay principle. the benefits principle. horizontal equity. vertical equity.
1) Suppose the figure represents the Laffer Curve for income taxes on high-income earners. If the tax rate on high-income earners is 55% a) marginal tax revenue will increase if tax rates are increased. b) marginal tax revenue is negative. c) the tax rate is optimal. d) marginal tax revenue is positive. 2) Suppose the figure represents the Laffer Curve for income taxes on high-income earners. Which of the following best explains the shape of the Laffer Curve? a) As tax rates rise, individuals work the same amount but conceal more income from tax authorities. b) As tax rates rise, individuals work the same amount and the same amount of income is available to tax. c) As tax rates rise, individuals work more and more income is available to tax. d) As tax rates rise, individuals work less and less income is available to tax
Compare the tax breaks for two different income groups in the Bush 2006 tax bill
With a regressive tax system, as the level of income increases in an economy, the average tax rate will: Multiple Choice remain constant. increase. decrease. either increase or decrease.

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