For purposes of assessing income taxes, there are three official income levels for workers ina small country: high, medium, and low.The table to the right gives the marginal tax rate for the last hour on the job during a 40-hourworkweek for each of these three worker types.Based only on this information, this nation's income tax system appears to be regressiveWorker typeLow-income workerMedium-income workerHigh-income workerMarginal tax rate15 percent20 percent25 percentproportionalprogressiveregressive

Based on the information provided, the nation's income tax system appears to be progressive.…

Answered: For purposes of assessing income taxes,…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The following table summarizes the income distribution for the town of Perkopia, which has a population of 10,000 people. Every individual within an income group earns the same income, and the total annual income in the economy is $500,000,000. Suppose that in 2006, the poverty line is set at an annual income of $42,350 for an individual. Year 2000 2006 2012 2018 Lowest Quintile 3.0 3.4 3.8 5.0 Share of Total Income in Perkopia (Percent) Middle Quintile Fourth Quintile Second Quintile 8.6 9.4 9.7 11.0 The data in the table suggest that there was 14.0 14.6 15.2 15.5 21.9 22.4 22.9 25.0 Highest Quintile 52.5 50.2 48.4 43.5 income inequality from 2000 to 2018.
The closer the Lorenz curve for income is to the line of equality, the larger is the nation's total income. the smaller is the nation's total income. the more equally are incomes distributed. the larger the fraction of the nation's income received by the richest families.
A Lorenz curve is a graphical representation of wealth distribution among a population. Conduct research to learn more about the Lorenz curve and answer the following questions. Draw a Lorenz curve and label the following components: Lorenz curve, income inequality line, total population and total income. Explain the shape of the curve in terms of income distribution, i.e. what happens to income inequality as you move along the Lorenz curve? Explain the concept of economic mobility as it relates to the Lorenz curve.
Some states exclude necessities, such as food andclothing, from their sales tax. Other states do not.Discuss the merits of this exclusion. Consider bothefficiency and equity.
To reduce income inequality, should the marginal tax rates on the top 1% be increased?
Why do you think there has been movement toward greater income equality during the 1929 to 1970 period, but movement toward greater income inequality since the 1970s (suggest some causes).
In New York workers face a state income tax rate of about 6.5%. In addition, workers who reside in New York City also face a city income tax of 3.5%. 1. In the long run, for which tax do workers bear a larger share of the incidence? Explain. 2. How would your answer to part (1) change if the city tax were temporary (lasting just a year). Explain. 3. IHow would your answers to parts (1) and (2) change if the city tax were on those who earned their money in New York City, and did not depend on city of residence?
Explain and interpret different methods of measuring income inequality.
Part B: Briefly provide three reasons as to why income inequality is on the rise in Canada and the US. Secondly, briefly explain how our respective tax systems can help reduce income inequality (be specific about the type of tax you are referring to).
What is the potential impact of income taxes on labor (consider the income effect and substitution effect)? Do you think it would be better to have a proportional income tax (flat tax) or progressive income tax? Explain.
The type of inequality before (pre) taxes and transfers are applied is called NET income inequality, and the inequality after (post) taxes and transfers is the MARKET income inequality. Group of answer choices True False

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