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

Question

Want to see more full solutions like this?

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.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

Draw the IS-LM diagram at equilibrium and use it to show how one or both of the curves change based on the following exogenous changes. An increase in taxes. An increase in the money supply An increase in government purchases

Don't use Ai. Answer in step by step with explanation.

corospond to this message. Gross Domestic Product (GDP) represents the total value of all goods and services produced by a country. The news reporter shows excitement because rising GDP signifies positive economic performance. Consumer spending has increased while businesses expand and new job opportunities become available. If the GDP rises, your delivery business will likely handle more packages as consumer purchasing increases. The increase in business activity will lead to more opportunities for your company to generate higher profits. You may need to take action by hiring additional staff and purchasing extra delivery vehicles or finding ways to improve your operation speed and efficiency to meet increased demand.

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.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

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.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

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.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

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.

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

Explanation of Solution

Want to see more full solutions like this?

Chapter 18 Solutions