Microeconomics
21st Edition
ISBN: 9781259915727
Author: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn Dr.
Publisher: McGraw-Hill Education
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Question
Chapter 20, Problem 5DQ
To determine
The most important source of revenue and expenditure for the state and local governments.
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Students have asked these similar questions
4
Economics
Below is a tax table. Assume I earn $150 a year. My tax bracket is
my marginal tax rate is
I pay in taxes.
my average tax rate is
; and
O to $100 is 10%
$101 to $200 is 15%
$201 to $300 is 20%
O 10%; 15%; 13.5%; $17.50
O 15%; 15%; 11.7%; $17.50
O none of these
O 15%; 15%; 12.5%; $13.50
5. LO 4 Suppose, as in the federal income tax code
for the United States, that the representative con-
sumer faces a wage income tax with a standard
deduction. That is, the representative consumer
pays no tax on wage income for the first x units of
real wage income, and then pays a proportional
taxt on each unit of real wage income greater than
x Therefore, the consumer's budget constraint
given by C wh -D + if wh- D=x., or
C (1-wh-D+ tx+ if_wCh = D2
Now, suppose that the government reduces
tax deduction x Using diagrams, determine the
effects of this tax change on the consumer, and
explain your results in terms of income and sub
stitution effects. Make sure that you consider two
cases. In the first case, the consumer does not pay
any tax before x is reduced, and in the second
case, the consumer pays a positive tax before x
is reduced
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