Foundations of Economics (8th Edition)
8th Edition
ISBN: 9780134486819
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 8, Problem 7IAPA
To determine
To calculate:
The average tax rate and marginal tax rate that is paid by the Mr. L and Ms. S and whether the levied income tax is fair.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Suppose you earn $40,000 per year and pay taxes based on marginal tax rates. The first tax bracket, which taxes at 5 percent, ranges
from $0 to $20,000. The second tax bracket, which taxes at 25 percent, ranges from $20,001 to $80,000. How much will you pay in
total taxes?
Instructions: Enter your answer as a whole number.
2$
Suppose you earned $60,000 per year and pay taxes based on marginal tax rates. The first tax bracket which taxes at 10% ranges from zero dollars to $30,000. The second tax bracket which tax at 25% ranges from 30,001 to $120,000. How much will you pay in total taxes?
Imagine Two Households each with an income of $65,000 per year. Household A consists of two married
individuals both 51 years old with one child who is now 27 years old and out of the house. Household B
consists of two married individuals who are 31 years old and have three young children, two of which attend
day care. The Government in implementing policies to effect Tax Fairness will concentrate on:
The Benefits Principle
The Marginal Tax Rate of each Household
Each Household's individual Laffer Curve
Which Household has the greater economic capacity
Chapter 8 Solutions
Foundations of Economics (8th Edition)
Ch. 8 - Prob. 1SPPACh. 8 - Prob. 2SPPACh. 8 - Prob. 3SPPACh. 8 - Prob. 4SPPACh. 8 - Prob. 5SPPACh. 8 - Prob. 6SPPACh. 8 - Prob. 7SPPACh. 8 - Prob. 8SPPACh. 8 - Prob. 9SPPACh. 8 - Prob. 10SPPA
Ch. 8 - Prob. 1IAPACh. 8 - Prob. 2IAPACh. 8 - Prob. 3IAPACh. 8 - Prob. 4IAPACh. 8 - Prob. 5IAPACh. 8 - Prob. 6IAPACh. 8 - Prob. 7IAPACh. 8 - Prob. 8IAPACh. 8 - Prob. 9IAPACh. 8 - Prob. 10IAPACh. 8 - Prob. 1MCQCh. 8 - Prob. 2MCQCh. 8 - Prob. 3MCQCh. 8 - Prob. 4MCQCh. 8 - Prob. 5MCQCh. 8 - Prob. 6MCQCh. 8 - Prob. 7MCQCh. 8 - Prob. 8MCQ
Knowledge Booster
Similar questions
- Suppose in Fiscalville there is a 5 percent tax on the first $10,000 of income, but there is a 15 percent tax on earnings between $10,000 and $20,000 and a 25 percent tax on income between $20,000 and $30,000. Any income above $30,000 is taxed at 35 percent. Instructions: Round your answers to the nearest whole number. a. If your income is $70,000, how much will you pay in taxes? b. Determine your marginal tax rate. percent c. Determine your average tax rate. percentarrow_forwardSuppose in Fiscalville there is a 0 percent tax on the first $10,000 of income, but there is a 20 percent tax on earnings between $10,000 and $20,000 and a 30 percent tax on income between $20,000 and $30,000. Any income above $30,000 is taxed at 40 percent. Instructions: Round your answers to the nearest whole number. a. If your income is $60,000, how much will you pay in taxes? $ 13,000 8 b. Determine your marginal tax rate. 40 percent c. Determine your average tax rate. 21.6 * percent d. Is Fiscalville's income tax progressive? Yesarrow_forwardThe govemment is considering imposing taxes onthe sellers of certain classes of products. The first tax they are considering is a tax on 2% milk. The second is a tax on all dairy products. The third is a tax on all food products. Which of these three taxes would you expect to have the largest impact on the sticker prices of the taxed products? Explain.arrow_forward
- Suppose in Fiscalville there is a 0 percent tax on the first $10,000 of income, but there is a 20 percent tax on earnings between $10,000 and $20,000 and a 30 percent tax on income between $20,000 and $30,000. Any income above $30,000 is taxed at 40 percent. Instructions: Round your answers to the nearest whole number. a. If your income is $70,000, how much will you pay in taxes? 2$ b. Determine your marginal tax rate. percent c. Determine your average tax rate. percent d. Is Fiscalville's income tax progressive? (Click to select) Varrow_forwardSuppose that the U.S. government decides to charge cola consumers a tax. Before the tax, 20 million cases of cola were sold every month at a price of $4 per case. After the tax, 13 million cases of cola are sold every month; consumers pay $7 per case (including the tax), and producers receive $2 per case. The amount of the tax on a case of cola is S per case. Of this amount, the burden that falls on consumers is $ per case, and the burden that falls on producers is $ per case. True or False: The effect of the tax on the quantity sold would have been larger if the tax had been levied on producers. True Falsearrow_forwardDiscuss the key tenets of the U.S. personal income tax code. For example, our tax rates are progressive, which means that the more one earns the higher her tax rate. Do you think that this is fair?arrow_forward
- Discuss how a government might use taxation to affect the distribution of incomearrow_forwardIf the state government would like to increase tax revenue, please give three examples of products/commodities that the government should impose tax on so that they can collect the highest amount of tax revenue. Please explain your reasons clearly.arrow_forward20. Marta purchased a sweater for $15.67, a pair of socks for $2.13, and a bracelet for $6.78. For all purchases she must pay the state sales tax of 7.5% and the county tax of 0.5%. What is the tax on her purchases?arrow_forward
- Figure 8-4 The vertical distance between points A and B represents a tax in the market. 15 14+ 13+ 12 11+ 10 9+ 7+ 6+ Price Supply Demand 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 Quantity Refer to Figure 8-4. The price that sellers effectively receive after the tax is imposed isarrow_forwardHow do governments use spending and taxation to reduce inequality How do governments use spending and taxation to reduce inequality and poverty in an economy? How do governments use spending and taxation to reduce inequalityarrow_forwardAlcohol and tobacco are products that contribute the most to the feral government’s tax revenue. Use the concept of elasticity to explain why.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Microeconomics: Principles & PolicyEconomicsISBN:9781337794992Author:William J. Baumol, Alan S. Blinder, John L. SolowPublisher:Cengage Learning
Exploring EconomicsEconomicsISBN:9781544336329Author:Robert L. SextonPublisher:SAGE Publications, Inc
Principles of Microeconomics (MindTap Course List)EconomicsISBN:9781305971493Author:N. Gregory MankiwPublisher:Cengage Learning
Principles of Economics (MindTap Course List)EconomicsISBN:9781305585126Author:N. Gregory MankiwPublisher:Cengage Learning
Economics Today and Tomorrow, Student EditionEconomicsISBN:9780078747663Author:McGraw-HillPublisher:Glencoe/McGraw-Hill School Pub Co
Microeconomics: Principles & Policy
Economics
ISBN:9781337794992
Author:William J. Baumol, Alan S. Blinder, John L. Solow
Publisher:Cengage Learning
Exploring Economics
Economics
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:SAGE Publications, Inc
Principles of Microeconomics (MindTap Course List)
Economics
ISBN:9781305971493
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Principles of Economics (MindTap Course List)
Economics
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Economics Today and Tomorrow, Student Edition
Economics
ISBN:9780078747663
Author:McGraw-Hill
Publisher:Glencoe/McGraw-Hill School Pub Co