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Subpart (a):
Percentage of federal taxes.
Subpart (a):
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Explanation of Solution
Using information in Table 36, the percentages of federal taxes paid from the “top down” by the top 40%, top 60%, or top 80% of income earners and from the “bottom up” by the bottom 40%, 60%, or 80% of income earners are mined and tabulated in Table 1.
Table 1
Share of Total Federal tax revenue | Share of Total Federal tax revenue | ||
Everyone | 100% | Everyone | 100% |
Bottom 20% | 0.8% | Top 80% | 99% |
Bottom 40% | 4.9% | Top 60% | 94.9% |
Bottom 60% | 14.2% | Top 40% | 85.6% |
Bottom 80% | 31.1% | Top 20% | 68.7% |
Concept Introduction:
Tax: Tax is the financial charge or obligation that is levied on the taxpayer by the government to meet its public expenditure and other development work in the interest of the country. Tax is one of the biggest sources for the government revenue through which the government meets its expenditure.
Subpart (b):
Identifying true statements.
Subpart (b):
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Explanation of Solution
Based on the information in Table 1, the following statements are true:
Statement (i) says that the bottom 60% of taxpayers pay less than 25% of federal taxes, and statement (ii) says that the top 80% of taxpayers pay over 98% of federal taxes.
Statement (iii) is false because by the data in Table 1, 40% of taxpayers pay more than 60% of federal taxes.
Concept Introduction:
Tax: Tax is the financial charge or obligation that is levied on the taxpayer by the government to meet its public expenditure and other development work in the interest of the country. Tax is one of the biggest sources for the government revenue through which the government meets its expenditure.
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Chapter 17 Solutions
Modern Principles: Macroeconomics
- Everything is in attached picture. 23arrow_forward1) Use the supply and demand schedules to graph the supply and demand functions. Find and show on the graph the equilibrium price and quantity, label it (A). P Q demanded P Q supplied 0 75 0 0 5 65 5 0 10 55 10 0 15 45 15 10 20 35 20 20 25 25 25 30 30 15 30 40 35 40 5 0 35 40 50 60 2) Find graphically and numerically the consumers and producers' surplus 3) The government introduced a tax of 10$, Label the price buyers pay and suppliers receive. Label the new equilibrium for buyers (B) and Sellers (S). How the surpluses have changed? Give the numerical answer and show on the graph. 4) Calculate using midpoint method the elasticity of demand curve from point (A) to (B) and elasticity of the supply curve from point (A) to (C).arrow_forwardFour heirs (A, B, C, and D) must divide fairly an estate consisting of three items — a house, a cabin and a boat — using the method of sealed bids. The players' bids (in dollars) are: In the initial allocation, player D Group of answer choices gets no items and gets $62,500 from the estate. gets the house and pays the estate $122,500. gets the cabin and gets $7,500 from the estate. gets the boat and and gets $55,500 from the estate. none of thesearrow_forward
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