Generational accounting techniques (recall Chapter 4) suggest that future income tax rates will be higher than current tax rates. How should this information affect the savings rate? How should it affect the relative appeal of Roth versus traditional tax deferred IRAs?
Answer to relevant QuestionsIn some cultures, when a member of the community who is ineligible for government provided social insurance faces some adverse condition, the rest of the community lends that member money until his or her condition improves. ...President Berry suggests changing the capital gains tax law such that taxes are assessed when the gains are accrued rather than when they are realized. Why would investors tend to oppose this policy change? The government of Lupostan introduced a policy in which all investments in college education and training are tax-deductible. Describe an empirical test of the effects of this policy on the level of human capital ...Suppose that new machines cost $504, and the marginal benefit from new machines is MB = 246 – 6K, where K is the number of machines purchased. The depreciation rate is 15% and the dividend yield is 10%. a. What amount of ...Different states have different corporate tax rates. How could you use this to study the elasticity of corporate investment with respect to corporate tax rates? What would be the problems with this approach?
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