EBK MACROECONOMICS
10th Edition
ISBN: 9780134896571
Author: CROUSHORE
Publisher: VST
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Chapter 15, Problem 6RQ
To determine
To know: Example which shows difference between average tax rate and marginal tax rate. Type of tax which affects wealthy person and reward for working an extra hour.
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Students have asked these similar questions
Can the method of loan repayment also have a significant impact on taxes? How?
The FICA tax is levied on employers, employees, and certain self-employed individuals.
Revenue goes to Social Security and Medicare. In 2014, the employee's contribution to the
retirement part of the FICA tax was 6.2 percent of the first $117,000 earned in wages and
salaries. (Medicare is withheld on all wages and tips.) People with income from interest and
dividend
payments do not have to pay any Social Security tax on this income.
What is the tax structure for the income tax over the income range of $0 to $117,000?
O Proportional Tax
O Progressive Tax
Regressive Tax
Use the table of tax rates below to answer questions 3 through 7.
Income range Tax rate
$15,000 and below 5%
$15,001-$30,000
8%
$30,001-$60,000 12%
$60,001-$120,000 20%
What tax is paid by someone who earns $60,000?
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- What is the difference between an expenditure (cash-flow) tax and a sales tax? What is the difference between an expenditure tax (cash-flow) and an income tax?arrow_forwardConsider the following to tax schemes: In the first tax scheme the first 300$ is tax exempt and the remaining earning are taxed at 20%. In the second system there is no tax exemption but the tax rate is 25% over the whole income earned? Which tax system is more progressive? Make sure that you define your measures of tax progressivity and show whether they conflict with each other or not.arrow_forward20. Marta purchased a sweater for $15.67, a pair of socks for $2.13, and a bracelet for $6.78. For all purchases she must pay the state sales tax of 7.5% and the county tax of 0.5%. What is the tax on her purchases?arrow_forward
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