Micro Economics For Today
10th Edition
ISBN: 9781337613064
Author: Tucker, Irvin B.
Publisher: Cengage,
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Question
Chapter 12, Problem 12SQ
To determine
The case of the families earning an income between $10,000 and $40,000.
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I need the other side of the chart for progressive tax calculation.
The government implements a negative Income tax plan with a guaranteed minimum income of $5,000 and a phase-out rate for
payments of 50%.
Complete the following table by calculating the negative tax and total after-tax income for each family income given. (Note: Suppose that any income
above $10,800 would pay a positive tax.)
Family Income Negative Tax
(Dollars)
(Dollars)
0
2,800
4,800
6,800
8,800
10,800
Total After-Tax Income
(Dollars)
A regressive tax
A. imposes a greater burden on those with higher incomes than on those with lower incomes
B. is based on the ability to pay principle
C. takes a greater percentage of the income of lower-income groups than of higher-income groups.
D. is based on the benefits received principle.
E. is considered to be the most equitable type of tax
Chapter 12 Solutions
Micro Economics For Today
Ch. 12.2 - Prob. 1YTECh. 12.2 - Prob. 2YTECh. 12.5 - Prob. 1.1YTECh. 12.5 - Prob. 2.1YTECh. 12 - Prob. 1SQPCh. 12 - Suppose each family in the United States earned an...Ch. 12 - Prob. 3SQPCh. 12 - Prob. 4SQPCh. 12 - Prob. 5SQPCh. 12 - Prob. 6SQP
Ch. 12 - Prob. 7SQPCh. 12 - Prob. 8SQPCh. 12 - Prob. 9SQPCh. 12 - Prob. 10SQPCh. 12 - Prob. 11SQPCh. 12 - Prob. 1SQCh. 12 - Prob. 2SQCh. 12 - Prob. 3SQCh. 12 - Prob. 4SQCh. 12 - Prob. 5SQCh. 12 - Prob. 6SQCh. 12 - Prob. 7SQCh. 12 - Prob. 8SQCh. 12 - Prob. 9SQCh. 12 - Prob. 10SQCh. 12 - Prob. 11SQCh. 12 - Prob. 12SQCh. 12 - Prob. 13SQCh. 12 - Prob. 14SQCh. 12 - Prob. 15SQCh. 12 - Prob. 16SQCh. 12 - Prob. 17SQCh. 12 - Prob. 18SQCh. 12 - Prob. 19SQCh. 12 - Prob. 20SQ
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- Describe the advantages that a negative income tax has over other programs that have the same purpose.arrow_forwardI need help with this chartarrow_forwardWhat effect does implementing a progressive tax system have on income inequality in a country? A. It increases income inequality. B. It has no effect on income inequality. C. It decreases income inequality. D. It first decreases income inequality, then increases it.arrow_forward
- Complete the table and answer the following questions. After-Tax Before-Tax Income Tax Rate Tax Paid Income High-Income Family $500,000 39.6% Middle-Income Family 50,000 20% Low-Income Family 20,000 10% Using the table, the ratio of a high-income family's to a low-income family's a. before-tax income is: to 1 b. after-tax income is: to 1 c. Is this tax progressive?arrow_forwardThe government implements a negative income tax plan with a guaranteed minimum income of $5,000 and a phase-out rate for payments of 50%. Complete the following table by calculating the negative tax and total after-tax income for each family income given. (Note: Suppose that any income above $10,600 would pay a positive tax.) Family Income (Dollars) Negative Tax Total After-Tax Income (Dollars) (Dollars) 0 2,600 4,600 6,600 8,600 10,600arrow_forwardWhich type of tax takes a larger percentage of income from high-income earners than from low-income earners? A. Regressive tax B. Proportional tax C. Progressive tax D. Flat taxarrow_forward
- Consider by $150. The average citizen there spends 90% of each additional dollar of income earned. a government that raises taxes Calculate the total change in income (Y) that will result. Carefully follow all numeric directions. Use a negative number to indicate a decrease in Y and a positive number to indicate an increase.arrow_forwardImpact of higher taxes on labor income from now to next 5 years.arrow_forwardThe Federal Government brings in revenue through taxation in all of the following forms EXCEPT: A. Individual Income Tax B. Capital Gains Tax C. Corporate Income Tax D. Sales and Property Taxarrow_forward
- Government collects the largest percentage of its revenue in which of the following ways? A) excise tax B) payroll tax C) corporate income tax D) personal income taxarrow_forwardWhen the income tax was first proposed in 1894, it was ruled unconstitutional? True or falsearrow_forwardDiscuss the key tenets of the U.S. personal income tax code. For example, our tax rates are progressive, which means that the more one earns the higher her tax rate. Do you think that this is fair?arrow_forward
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