Micro Economics For Today
10th Edition
ISBN: 9781337613064
Author: Tucker, Irvin B.
Publisher: Cengage,
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Chapter 12, Problem 12SQ
To determine
The case of the families earning an income between $10,000 and $40,000.
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Students have asked these similar questions
Define income tax.
Describe the advantages that a negative income tax has over other programs that have the same purpose.
The government implements a negative Income tax plan with a guaranteed minimum income of $5,000 and a phase-out rate for
payments of 50%.
Complete the following table by calculating the negative tax and total after-tax income for each family income given. (Note: Suppose that any income
above $10,800 would pay a positive tax.)
Family Income Negative Tax
(Dollars)
(Dollars)
0
2,800
4,800
6,800
8,800
10,800
Total After-Tax Income
(Dollars)
Chapter 12 Solutions
Micro Economics For Today
Ch. 12.2 - Prob. 1YTECh. 12.2 - Prob. 2YTECh. 12.5 - Prob. 1.1YTECh. 12.5 - Prob. 2.1YTECh. 12 - Prob. 1SQPCh. 12 - Suppose each family in the United States earned an...Ch. 12 - Prob. 3SQPCh. 12 - Prob. 4SQPCh. 12 - Prob. 5SQPCh. 12 - Prob. 6SQP
Ch. 12 - Prob. 7SQPCh. 12 - Prob. 8SQPCh. 12 - Prob. 9SQPCh. 12 - Prob. 10SQPCh. 12 - Prob. 11SQPCh. 12 - Prob. 1SQCh. 12 - Prob. 2SQCh. 12 - Prob. 3SQCh. 12 - Prob. 4SQCh. 12 - Prob. 5SQCh. 12 - Prob. 6SQCh. 12 - Prob. 7SQCh. 12 - Prob. 8SQCh. 12 - Prob. 9SQCh. 12 - Prob. 10SQCh. 12 - Prob. 11SQCh. 12 - Prob. 12SQCh. 12 - Prob. 13SQCh. 12 - Prob. 14SQCh. 12 - Prob. 15SQCh. 12 - Prob. 16SQCh. 12 - Prob. 17SQCh. 12 - Prob. 18SQCh. 12 - Prob. 19SQCh. 12 - Prob. 20SQ
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- Excise taxes on tobacco and alcohol and state sales taxes are often criticized for being regressive. Although everyone pays the same rate regardless of Income, why might this be so?arrow_forwardA regressive tax A. imposes a greater burden on those with higher incomes than on those with lower incomes B. is based on the ability to pay principle C. takes a greater percentage of the income of lower-income groups than of higher-income groups. D. is based on the benefits received principle. E. is considered to be the most equitable type of taxarrow_forwardIncome amount of tax 10,000 2,000 50,000 2,000 100,000 2,000 calculate the percentage of income paid in tax. Is this an example of a progressive, regressive or proportional tax? Explain.arrow_forward
- What effect does implementing a progressive tax system have on income inequality in a country? A. It increases income inequality. B. It has no effect on income inequality. C. It decreases income inequality. D. It first decreases income inequality, then increases it.arrow_forwardComplete the table and answer the following questions. After-Tax Before-Tax Income Tax Rate Tax Paid Income High-Income Family $500,000 39.6% Middle-Income Family 50,000 20% Low-Income Family 20,000 10% Using the table, the ratio of a high-income family's to a low-income family's a. before-tax income is: to 1 b. after-tax income is: to 1 c. Is this tax progressive?arrow_forwardFederal income tax is (a. progressive b. proportionate (flat) c. regressive) , Social Security tax is (a. progressive b. proportionate (flat) c. regressive ) , Medicare tax is (a. progressive b. proportionate (flat) c. regressive) and sales tax is (a. progressive b. proportionate (flat) c. regressive) when comparing an income of $50,000 per year to an income of $150,000 per year.arrow_forward
- Consider by $150. The average citizen there spends 90% of each additional dollar of income earned. a government that raises taxes Calculate the total change in income (Y) that will result. Carefully follow all numeric directions. Use a negative number to indicate a decrease in Y and a positive number to indicate an increase.arrow_forwardImpact of higher taxes on labor income from now to next 5 years.arrow_forwardWhich tax is the largest source of tax revenue in the United States? personal income taxes social insurance taxes corporate profit taxes value added taxes national sales taxesarrow_forward
- When the income tax was first proposed in 1894, it was ruled unconstitutional? True or 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_forwardThe Federal Government brings in revenue through taxation in all of the following forms EXCEPT: A. Individual Income Tax B. Capital Gains Tax C. Corporate Income Tax D. Sales and Property Taxarrow_forward
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