QUESTION 21. Consider the following version of the earned income tax credit (EITC).All persons who earn less than $20,000 are given a wage subsidy of $0.50 for each dollarworked. The maximum benefit is therefore $10,000.All persons who earn between $20,000 and $30,000 are paid the maximum benefit of$10,000. This is the income disregard region.The phaseout occurs in the income range from $30,000 to $50,000. In this range the maximumbenefit $10,000 is cut by $0.50 for each dollar earned. For example, a person who earns$30,001 will get paid $10,000 -$0.50 = $9,999.50. At an income of $50,000 the program hasbeen totally phased out.Now focus on a person initially working and earning $15,000 before the plan is introduced.Consider the net effect of this program (i.e, we are talking in this question about BOTH theincome and substitution effects) for a person earning this amount. The program will:a. have no effect on time spent workingb. cause time spent working to risec. cause time spent working to fallmay cause time spent working to rise, fall, or remain the samed.

Income is a residual amount left after netting of net expenses incurred to earn that income. The net…

1. Consider the following version of the earned income tax credit (EITC). All persons who earn less than $20,000 are given a wage subsidy of $0.50 for each dol. vorked. The maximum benefit is therefore $10,000. All persons who earn between $20,000 and $30,000 are paid the maximum benefit of $10,000. This is the income disregard region. The phaseout occurs in the income range from $30,000 to $50,000. In this range the m penefit $10,000 is cut by $0.50 for each dollar earned. For example, a person who earn $30,001 will get paid $10,000 -$0.50 = $9,999.50. At an income of $50,000 the program been totally phased out. Now focus on a person initially working and earning $15,000 before the plan is introdud %3D

1. Consider the following version of the earned income tax credit (EITC). All persons who earn less than $20,000 are given a wage subsidy of $0.50 for each dol. vorked. The maximum benefit is therefore $10,000. All persons who earn between $20,000 and $30,000 are paid the maximum benefit of $10,000. This is the income disregard region. The phaseout occurs in the income range from $30,000 to $50,000. In this range the m penefit $10,000 is cut by $0.50 for each dollar earned. For example, a person who earn $30,001 will get paid $10,000 -$0.50 = $9,999.50. At an income of $50,000 the program been totally phased out. Now focus on a person initially working and earning $15,000 before the plan is introdud %3D

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Answer number 8-10 only with explanation.
Suppose two workers earn labor incomes of $20,000 per year in each of two tax accounting periods. One worker saves 20% of her labor earnings in the first period and spends all of her savings and accumulated interest in the final period. The other worker never saves any of her labor earnings. The market rate of interest is 10%.' a. Calculate the discounted present value of taxes paid over the two periods for each of the workers under a 15% comprehensive income tax. b. Calculate the discounted present value of taxes paid over the two periods under a comprehensive consumption tax. c. Comment on the equity and efficiency aspects of each of the two taxes.
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1.
If the sep plan stipulates thatthe maximum contribution percentage is 25% of compensation, the percentage of compensation a business owner may contrbute to their own sep account is?
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1. Pepe is a Manager working at Ayala Malls Legazpi for Taxable year 2020. He had the following data: • Basic Pay- 259,000.00 • Holiday & GT- 50,000.00 • Incentives - 50,000.00 TOTAL 359,000.00 Travel Allowance (to be liquidated) 100,000.00 MANDATORY BENEFITS: . SSS 10,000.00 • PHIC 1,200.00 • HDMI 1,000.00 Total 12,200.00 . COMPUTE THE GROSS COMPENSATION
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