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Citizens in the land of Notax (a country in another parallel universe!) Are non-taxpayers (never paying income tax), facing a wage rate in that country of NOX 10 / hour. In addition, residents of Notax also do not receive any transfer of income from their government and are free to determine the working hours they wish to allocate in the labor market. It is assumed that residents of Notax have different preferences as well as preferences for their consumption and leisure. The regime in power in Notax is considering submitting a proposal to parliament entitled "Taxes and Expenditures" (Pakja).
With Pakja a system applies where the community will be subject to an income tax of 20% for every NOX wage received by workers. At the same time there is also a system whereby the government will provide a transfer to each resident of NOX 100 as real non-wage income.
(NOX is the currency unit code name of the Notax country. The NOX exchange rate against the dollar is irrelevant in this case because they are in different universes, so there is no need to compare with the
Question:
Will the Pakja proposal cause Notax residents to choose to work more, less or the same?
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- Citizens in the land of Notax (a country in another parallel universe!) Are non-taxpayers (never paying income tax), facing a wage rate in that country of NOX 10 / hour. In addition, residents of Notax also do not receive any transfer of income from their government and are free to determine the working hours they wish to allocate in the labor market. It is assumed that residents of Notax have different preferences as well as preferences for their consumption and leisure. The regime in power in Notax is considering submitting a proposal to parliament entitled "Taxes and Expenditures" (Pakja). With Pakja a system applies where the community will be subject to an income tax of 20% for every NOX wage received by workers. At the same time there is also a system whereby the government will provide a transfer to each resident of NOX 100 as real non-wage income. (NOX is the currency unit code name of the Notax country. The NOX exchange rate against the dollar is irrelevant in this case…Citizens in the land of Notax (a country in another parallel universe!) Are citizens who are not taxpayers (have never paid income tax), face a wage rate in that country of NOX1 10 / hour. In addition, residents of Notax also do not receive any transfer of income from their government and are free to determine the working hours they wish to allocate in the labor market. It is assumed that residents of Notax have different preferences as well as preferences for their consumption and leisure time. The regime governing Notax is considering submitting a proposal to the entitled "Taxes and Expenditures" (Pakja). With the Pakja tax system where the community will bear an income of 20% for every NOX wage received by workers. At the same time is also the system whereby the government will provide a transfer to each resident of NOX 100 as real non-wage income. a. Describe in detail the curves of the budget constraints faced by workers in the country of Notax today and also the conditions that…For every hour up to 40 hours of work each week, Mary earns $16/hour, and for any extra hour in excess of 40, she earns $20/hour. The current tax rate that she faces is 20%. She also needs to pay $4 per each hour she works for childcare service while receives $80 in childcare support payments each week. Mary has 16 non-sleeping hours a day (112 hours) in a week. Her non-labour market income is $60 per week. What will be her weekly consumption amount if she works for 58 hours a week?
- As a hypothetical case, suppose the typical individual has a utility function expressed as U = (C – 50)*(L – 10), where C is consumption and L is leisure time. The current wage, w,is $5 and she has a weekly return on assets of V0020= $100. She only has 60 hours per week to divide between work hours, h, and Leisure. A number of countries and communities are considering implementing a “Guaranteed Basic Income” as policy. A “Guaranteed Basic Income” is a government payment of a fixed a amount of money for each personSuppose the country of interest sets the weekly payment at $100. Using the Neo-classical labor supply with reference to specific numerical values discuss the consequences of the above “Guaranteed Basic Income”. Using the basic Supply and Demand for labor approach discuss the consequences of the “Guaranteed Basic Income” policy on the overall labor market. 3.Using a feedback approach, from the Neo-classical labor supply to market equilibrium and back to labor supply,…The following table shows income tax rates in Econoland. Annual Income Up to $60,000 From $60,001 to $90,000 Over $90,000 This is an example of a Tax Rate 10% 20% 30% income tax. Nick, a resident of Econoland, currently works 20 hours a week and earns an annual income of $60,000. After paying income taxes, Nick receives per year. If Nick works an additional 10 hours a week (30 hours a week total), his annual income will be $90,000. After paying income taxes, Nick will receive per year. In other words, by working an additional 10 hours per week, Nick will receive an additional If Nick works 10 more hours in a week (40 hours a week total), his annual income will further increase to $120,000. After paying income taxes, Nick will receive per year. In other words, by working 10 more hours per week, Nick will receive more than what he would receive if he works only 30 hours a week. As Nick works more, the additional amount he receives from working 10 more hours " which means his cost of…In Raphael Kingdom, it is known that at a point in time the people depended on benevolence to meet their consumption. This amounted to $200, however every $ 1; 80% goes to consumption. Additionally, the rich people of Raphael Kingdom carried the economy on their shoulders. This led to them putting $ 800 of their wealth in economy which led to the creation of a lot of jobs for the citizens. The government of the Kingdom supports production efforts by an amount of $ 400 as well as creating the enabling environment for all persons in the kingdom. Goods produced in the kingdom were consumed locally none of was exported or imported. The tax structure of kingdom consists of a lump sum tax of $ 100 and a proportional income tax rate of 2%. Given that you have been recruited as an expert to examine the economy of the Kingdom what will your advice or response to the following questions be? Derive the consumption and saving functions for the kingdom explain the components of the…
- Under one plan for Social Security reform, younger workers can put up to $1,000 of their payroll taxes into an individual retirement account (IRA) in exchange for lower benefits when they retire. However, advocates of this plan typically offer a method of ensuring that funds in an IRA are turned into benefits that work in a Social Security–like fashion (e.g., monthly payments until one dies). (a) What restriction could policy makers implement to ensure that money in an IRA be paid similarly to Social Security? (b) Why wouldn't policy makers simply allow individuals to accept a lower level of Social Security benefits in exchange for a lower level of taxation without also mandating that individuals put the saved tax funds in an IRA?The country of Autarkistan is currently closed off from the world and engages in no international trade. Like the rest of the world, it produces and consumes (only) two goods, textiles and machines, using labor and capital. The textile industry employs more labor, per unit of capital, than does the machine industry. Being poor, Autarkistan has far less capital per worker than does the rest of the world. According to the Factor Proportions (H-O) model of international trade, in which good does Autarkistan have a comparative advantage? Again, suppose that Autarkistan opens up to free international trade with the world. Using the H-O model, what will happen to the real wage of labor in the machine industry in Autarkistan? Group of answer choices Rise Fall Not Change Cannot tell.The country of Autarkistan is currently closed off from the world and engages in no international trade. Like the rest of the world, it produces and consumes (only) two goods, textiles and machines, using labor and capital. The textile industry employs more labor, per unit of capital, than does the machine industry. Being poor, Autarkistan has far less capital per worker than does the rest of the world. According to the Factor Proportions (H-O) model of international trade, in which good does Autarkistan have a comparative advantage? Group of answer choices Textiles Machines Cannot tell.
- Suppose a single parent can work up to 16 hours per day at a wage rate of $30 per hour and has no non-labour income. An income maintenance program has been developed to assure a minimum level of income for low-income families. A simplified version of this type of a program is one that would give this single parent a $120 no-work grant accompanied by a benefit reduction of a dollar for every dollar earned until no benefit is left to pay. For example, to someone who does not work the program pays $120, while for someone who works 1 hour and earns $30 the benefit is reduced by $30 to $90. Draw the daily budget constraints with and without program participation for the single individual described above on the plane that has leisure L on the horizontal axis, and money income Y (inclusive of benefits if on a program) on the vertical axis. Carefully mark all the important points of the constraints and indicate the slopes. Question: At what level of labour market earningsdoes the subsidy end?…Keep in mind that you don’t have to die to have to pay inheritance and gift taxes under the current tax code. Anyone who gives a family member more than $11.5 million (as of 2020 indexed annually for inflation) is subject to the tax. Is that amount too high or too low, and why?Susan is a single mother with three children. She is a cashier at a food market earning $7.75 per hour and works up to 2,000 hours per year. She is eligible for government benefits, so if she does not earn any income, she will receive a total of $17,050 per year. She can work and still receive government benefits, but for every $1 of income, her government stipend is $1 less. The government has decided to change the benefits policy of every $1 of income earned to reduce the government’s stipend by 60 cents. How will this change Susan's benefits received? What are her new choices? Complete the Revised Poverty Trap Table to present Susan’s options and provide answers to the following: What are the advantages of Susan working? What are the disadvantages of Susan working? What are the advantages of Susan receiving government benefits? What are the disadvantages of Susan receiving government benefits? Based on your findings from the Poverty Trap Table, should Susan continue to work or…
