3. (15 points) Sasha is a well-paid accountant, and for every hour she works, she earns...

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3. (15 points) Sasha is a well-paid accountant, and for every hour she works, she earns $50 before taxes. Further- more, suppose that she can work up to 10 hours per day, 365 days per year. Draw her annual budget constraint reflecting the consumption-leisure trade-off under the following income tax schemes. For full credit, be sure to label all axes, intercepts, and kink points. (a) No taxes. (b) A flat tax of 15% on all income earned (c) An Earned Income Tax Credit where the first $20,000 is "taxed" at a -15% rate (i.e, subsidized at a 15% rate); the next $30,000 is not taxed at all; EITC benefits decline at a 10% rate to 0; all income over $70,000 is taxed at a 20% rate (d) Sasha is guaranteed $20,000 in income; all income after is taxed at 30% 3. (15 points) Sasha is a well-paid accountant, and for every hour she works, she earns $50 before taxes. Further- more, suppose that she can work up to 10 hours per day, 365 days per year. Draw her annual budget constraint reflecting the consumption-leisure trade-off under the following income tax schemes. For full credit, be sure to label all axes, intercepts, and kink points. (a) No taxes. (b) A flat tax of 15% on all income earned (c) An Earned Income Tax Credit where the first $20,000 is "taxed" at a -15% rate (i.e, subsidized at a 15% rate); the next $30,000 is not taxed at all; EITC benefits decline at a 10% rate to 0; all income over $70,000 is taxed at a 20% rate (d) Sasha is guaranteed $20,000 in income; all income after is taxed at 30%

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a No taxes Leisure hours on the xaxis Consumption on the yaxis Budget con... View the full answer