Explain income tax rate cut that causes rise in the tax revenue and a decline in budget deficit.

Question

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Answer 1

Question

Chapter 18, Problem 1QP

To determine

Explain income tax rate cut that causes rise in the tax revenue and a decline in budget deficit.

Expert Solution & Answer

Explanation of Solution

Cutting income tax leads to an increase in tax revenue of government and decrease in the budget deficit. Therefore, if the total amount of taxable income by government increases by more than the tax cut amount, the tax revenue will increase. Increase in tax revenue leads to a fall in the government budget deficit.

Economics Concept Introduction

Tax rate: The percentage of the tax base that must be paid in tax is termed tax rate.

Tax base: The total amount of income that can be taxed by a taxing authority is termed tax base.

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Answer 2

Question

Chapter 18, Problem 1QP

To determine

Explain income tax rate cut that causes rise in the tax revenue and a decline in budget deficit.

Expert Solution & Answer

Explanation of Solution

Cutting income tax leads to an increase in tax revenue of government and decrease in the budget deficit. Therefore, if the total amount of taxable income by government increases by more than the tax cut amount, the tax revenue will increase. Increase in tax revenue leads to a fall in the government budget deficit.

Economics Concept Introduction

Tax rate: The percentage of the tax base that must be paid in tax is termed tax rate.

Tax base: The total amount of income that can be taxed by a taxing authority is termed tax base.

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Answer 3

Question

Chapter 18, Problem 1QP

To determine

Explain income tax rate cut that causes rise in the tax revenue and a decline in budget deficit.

Expert Solution & Answer

Explanation of Solution

Cutting income tax leads to an increase in tax revenue of government and decrease in the budget deficit. Therefore, if the total amount of taxable income by government increases by more than the tax cut amount, the tax revenue will increase. Increase in tax revenue leads to a fall in the government budget deficit.

Economics Concept Introduction

Tax rate: The percentage of the tax base that must be paid in tax is termed tax rate.

Tax base: The total amount of income that can be taxed by a taxing authority is termed tax base.

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Answer 4

Question

Chapter 18, Problem 1QP

To determine

Explain income tax rate cut that causes rise in the tax revenue and a decline in budget deficit.

Expert Solution & Answer

Explanation of Solution

Cutting income tax leads to an increase in tax revenue of government and decrease in the budget deficit. Therefore, if the total amount of taxable income by government increases by more than the tax cut amount, the tax revenue will increase. Increase in tax revenue leads to a fall in the government budget deficit.

Economics Concept Introduction

Tax rate: The percentage of the tax base that must be paid in tax is termed tax rate.

Tax base: The total amount of income that can be taxed by a taxing authority is termed tax base.

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Answer 5

Chapter 18, Problem 1QP

To determine

Explain income tax rate cut that causes rise in the tax revenue and a decline in budget deficit.

Expert Solution & Answer

Explanation of Solution

Cutting income tax leads to an increase in tax revenue of government and decrease in the budget deficit. Therefore, if the total amount of taxable income by government increases by more than the tax cut amount, the tax revenue will increase. Increase in tax revenue leads to a fall in the government budget deficit.

Economics Concept Introduction

Tax rate: The percentage of the tax base that must be paid in tax is termed tax rate.

Tax base: The total amount of income that can be taxed by a taxing authority is termed tax base.

Answer 6

Chapter 18, Problem 1QP

To determine

Explain income tax rate cut that causes rise in the tax revenue and a decline in budget deficit.

Expert Solution & Answer

Explanation of Solution

Cutting income tax leads to an increase in tax revenue of government and decrease in the budget deficit. Therefore, if the total amount of taxable income by government increases by more than the tax cut amount, the tax revenue will increase. Increase in tax revenue leads to a fall in the government budget deficit.

Economics Concept Introduction

Tax rate: The percentage of the tax base that must be paid in tax is termed tax rate.

Tax base: The total amount of income that can be taxed by a taxing authority is termed tax base.

Answer 7

Chapter 18, Problem 1QP

To determine

Explain income tax rate cut that causes rise in the tax revenue and a decline in budget deficit.

Answer 8

Expert Solution & Answer

Explanation of Solution

Cutting income tax leads to an increase in tax revenue of government and decrease in the budget deficit. Therefore, if the total amount of taxable income by government increases by more than the tax cut amount, the tax revenue will increase. Increase in tax revenue leads to a fall in the government budget deficit.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Economics Concept Introduction

Tax rate: The percentage of the tax base that must be paid in tax is termed tax rate.

Tax base: The total amount of income that can be taxed by a taxing authority is termed tax base.

Answer 12

Ch. 18.10 - Prob. 1ST Ch. 18.10 - Prob. 2ST Ch. 18.10 - Prob. 3ST Ch. 18 - Prob. 1QP Ch. 18 - Prob. 2QP Ch. 18 - Prob. 3QP Ch. 18 - Prob. 4QP Ch. 18 - Prob. 5QP Ch. 18 - Prob. 6QP Ch. 18 - Prob. 7QP

Explain income tax rate cut that causes rise in the tax revenue and a decline in budget deficit.

Solution Summary: The author explains income tax rate cut that causes rise in the tax revenue and a decline in budget deficit.

Explain income tax rate cut that causes rise in the tax revenue and a decline in budget deficit.

Explanation of Solution

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Chapter 18 Solutions