Bundle: Principles of Economics, Loose-leaf Version, 8th + LMS Integrated MindTap Economics, 2 terms (12 months) Printed Access Card
8th Edition
ISBN: 9781337607735
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Question
Chapter 20, Problem 5CQQ
To determine
The negative income tax.
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Students have asked these similar questions
What 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.
MACROECONOMICS
Progressive Tax
Based on your yearly income above, calculate the amount of tax each income bracket would pay
under a progressive tax plan. Each row up to the total income amount should be filled in. For an
example of a completed chart, go to Page 4 of Lesson 05.03: Sharing with Uncle Sam.
Calculate the tax for $95,000.
For example,
$10,000x40%-%$4,000 in tax.
Show your work!!
Proposed Regressive Plan
Calculate the tax for
S25,000. For example,
$10,000x40%=$4,000 in
tax. Show your work!!
10% on income up to $25,000
20% on income between
S25,000 and S34,000
25% on income between
S34,000 and S44,000
30% on income between
$44,000 and S80,000
40% on taxable income over
S80,000
TOTAL TAX PAID (sum of all
rows):
How does a sales tax work?
A. A tax is levied on the value of real property or land.
B. A tax is levied on the consumer as a percentage of the sale of the good or service.
C. A tax is levied on the sale of gold or silver.
D. A tax is levied on a consumer at the end of the year if the consumer bought anything during the year.
Chapter 20 Solutions
Bundle: Principles of Economics, Loose-leaf Version, 8th + LMS Integrated MindTap Economics, 2 terms (12 months) Printed Access Card
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Similar questions
- When Ann's income increased from $100,000 to $120,000, her income tax payment increased from $22,000 to $30,000. Ann's average tax rate is and her marginal tax rate is A. 25 percent; 25 percent B. 40 percent; 25 percent C. 40 percent; 40 percent D. 25 percent; 40 percentarrow_forwardMatch the term and the definition: flat tax Places heavier burden on poor than on rich as your income increases, the percentage that you pay increases A. Progressive taxes B. Proportional taxes C. Regressive taxesarrow_forwardMustafa earns 72,000 TRY in a year. Assume that he has 8,000 TRY tax exemption. The following figure shows the marginal tax rates for different income intervals.a) Calculate total tax payments of Mustafa.b) Calculate average tax rate for Mustafa.arrow_forward
- Use information from paragraph 4 to answer the following question. Before the Progressive Era, many taxes had been based on property. But many wealthy people hid such property as stocks and bonds from the govemment and did not pay taxes on them. Largely for this reason, progressives demanded that taxes be based on income rather than on property. In 1911, Wisconsin passed the first effective state income tax law. Two years later, Congress enacted what became the first permanent federal income tax in the United States. Which conclusion about taxation during the Progressive Era is best supported by the text? O Progressives demanded that taxes be based on income rather than on property. O Property taxes included ownership of stocks and bonds, which are inescapable today. O Property taxes were an ineffective means for the government to collect the money it needed to operate. O Progressives managed to pass the first state income tax, which was two years before the federal law was passed. 7 8…arrow_forwardWhat is the effect of government purchased and taxation on the level of income?arrow_forward97. If the United States is to reduce poverty by using a negative income tax, the guaranteed income should be a. above the poverty line. b. close to the median income of all families. c. two times the tax rate. d. close to the poverty line.arrow_forward
- If the benefits from an antipoverty program are phasedout as an individual’s income increases, the program willa. encourage greater work effort from the poor.b. lead to an excess supply of labor among unskilledworkers.c. cost the government more than a program thatbenefits everyone.d. increase the effective marginal tax rate that thepoor face.arrow_forwardWhat is the best policy to implement with regard to taxes?arrow_forwardWhich of the following is an example of a positive economic statement? a.The government should not be involved in the income redistribution schemes. b.The after-tax distribution of income is more equal than the pre-tax distribution of income. c.The distribution of income in the United States should be more equal. d.The tax system should be more progressive so that the after-tax distribution of income can be more equal.arrow_forward
- President feels uncomfortable with the slow approval of the legislative body for the amendment of the Tax Code because he would need additional funds for the payment of the vaccines due to the pandemic. He then issued an Executive Order increasing the income tax rates 1% per bracket. Is the Executive Order valid? A. Yes, the Executive Order is valid because the increase is merely a collection of tax which is executive in order. B. No, the Executive Order is invalid because the 1% increase in income tax rates is inherently legislative. C. Yes, the Executive Order is valid because there is a national emergency. D. No, the Executive Order should be approved by Congress firstarrow_forwardDemonstrate how the distribution of income between rich and poor is affected by government taxes, transfers and spending.arrow_forwardChoose the letter of the correct answer. 1. This kind of tax is derived from the individuals, corporate estates, and trusts income. A. Donors tax B. Capital gains tax C. Income tax D. Estate tax 2. This is a kind of tax on the rights of the decreased person to transmit his/ her estate to lawful heirs and beneficiaries at the time of death. A. Donors tax B. Capital gains tax C. Income tax D. Estate tax 3. This is a tax levied on gifts and is imposed on the gratuitous transfer of property between two or more persons who are living at the time of the transfer. A. Estate tax B. Capital gains tax C. Income tax D. Donor Tax 4. A tax imposed on loan agreements and papers evidencing the acceptance, assignment, sale or transfer of an obligation. A. Documentary tax B. Capital gains tax C. Income tax D. Estate tax 5. A tax levied on the assessed value of land and permanently attached improvements owned by individuals or corporations. A. Property tax B. Capital gains tax C. Income tax…arrow_forward
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