Thelma's current income is $100,000 and she currently pays $30,000 in income tax.w Any income she earns above $100,000 is taxed at 40 percent. Which following correctly calculates her tax burden? the her average tax rate is 30 percent her marginal tax rate is 40 percent her average tax rate is 40 percent her marginal tax rate is 30 percent.

Table 12-16 The table below provides information on the 4 households that make up a small economy and how much they would pay in taxes under 3 types of taxes. Household A B C D Ability to Pay low and same as B low and same as A high and same as D high and same as C oooo Refer to Table 12-16. In this economy Tax C exhibits horizontal and vertical equity. horizontal equity but not vertical equity. vertical equity but not horizontal equity. Tax A 100 100 100 100 neither horizontal nor vertical equity. Tax B 30 30 40 1 40 Tax C 40 50 60 70

8. Explain why each of the following taxes is progressive or regressive. a. $1 per pack federal excise tax on cigarettes b. The federal individual income tax d. The federal payroll tax.

7. Within the context of taxation policy, many economists have preferred the use of consumption tax to income tax. Explain.

A government replaces progressive taxes with regressive taxes. What is the likely outcome?  a. Distribution of Income more even; Marginal Tax Rate decrease b. Distribution of Income more uneven; Marginal Tax Rate increase  c. Distribution of Income more uneven; Marginal Tax Rate decrease d. Distribution of Income more even; Marginal Tax Rate increase

24. Impact on Taxes. Lawrence has a marginal tax rate of 24%. He suddenly realizes that he neglected to include a $5,000 tax deduction. How will this oversight affect his taxes? =Lawrence paid $1200 excess tax because Lawrence neglected $ 5000 tax deduction 25. Impact on Taxes. From question 24, if Lawrence had forgotten a $5000 tax credit (instead of a $5000 tax deduction), how would his taxes be affected?

Suppose the city of Strelsau has a 10% property tax on rental properties. Rudolph makes $100,000 a year and pays $21,000 per year in rent. Fritz makes $40,000 per year and spends $10,800 in rent. Both Rudolph and Fritz rent from Michael. a. How is Strelsau's property tax best described? Regressive Proportional Incidental Progressive b. Who most likely actually pays the tax on rental property? The renters, Rudolph and Fritz, pay it. The landlord, Micheal, pays it. It is split evenly between the renters and the landlord. The renters and landlord negotiate who will pay it.

When Ann's income increased from $100,000 to $120,000, her income tax payment increased from $22,000 to $30,000. Ann's average tax rate is and her marginal tax rate is A. 25 percent; 25 percent B. 40 percent; 25 percent C. 40 percent; 40 percent D. 25 percent; 40 percent

Abraham. Income level $10,000 $50,000 $100,000 Refer to the table above. Abraham faces a a) progressive Ob) proportional Oc) regressive $5,000 $10,000 $15,000 Taxes Paid Brenda $1,000 $5,000 $10,000 tax system. Caitlyn $1,000 $10,000 $30,000

According to the textbook, which of the following statements about taxes in the U.S. is (are) correct? (x)  Tax evasion is illegal, but tax avoidance is legal. (y)  Most economists believe that a corporate income tax affects the stockholders of a corporation but not its employees or customers. (z)  In practice, the U.S. income tax system is filled with special provisions that alter a family's tax based on its specific circumstances. A. (x), (y) and (z) B. (x) and (y) only C. (x) and (z) only D. (y) and (z) only E. (z) only