Suppose there are two taxpayers, Leila and Frederick. Leila is a single mother of three who...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Suppose there are two taxpayers, Leila and Frederick. Leila is a single mother of three who earned $60,000 annually in wage income and Frederick is a single father with one child and earned $150,000 annually in wage income. Also, suppose that earnings below $10,000 are taxed at a 10% marginal rate, earnings between $10,000 and $40,000 are taxed at a 12% marginal rate and earnings between $40,000 and $85,000 are taxed at a marginal rate of 22% and earnings between 85,000 and 160,000 are taxed at 24%. a. Assuming that there is a personal exemption of $4,000 and a standard deduction of $6,000 for a single filer, and a tax credit of $1,000 per child what is the tax liability of Leila? What is the tax liability of Frederick? Show your work. (6 points) b. Assume now that the personal exemption was eliminated, the standard deduction increased to $12,000 and there was a tax credit of $2,000 per child. What is the tax liability of Leila? What is the tax liability of Frederick? (5 points) c. Is the increase of the child tax credit between "a" and "b" making the income tax system more or less "fair"? Explain in detail using the information that you have learned in the course to define fair. (4 points) Suppose there are two taxpayers, Leila and Frederick. Leila is a single mother of three who earned $60,000 annually in wage income and Frederick is a single father with one child and earned $150,000 annually in wage income. Also, suppose that earnings below $10,000 are taxed at a 10% marginal rate, earnings between $10,000 and $40,000 are taxed at a 12% marginal rate and earnings between $40,000 and $85,000 are taxed at a marginal rate of 22% and earnings between 85,000 and 160,000 are taxed at 24%. a. Assuming that there is a personal exemption of $4,000 and a standard deduction of $6,000 for a single filer, and a tax credit of $1,000 per child what is the tax liability of Leila? What is the tax liability of Frederick? Show your work. (6 points) b. Assume now that the personal exemption was eliminated, the standard deduction increased to $12,000 and there was a tax credit of $2,000 per child. What is the tax liability of Leila? What is the tax liability of Frederick? (5 points) c. Is the increase of the child tax credit between "a" and "b" making the income tax system more or less "fair"? Explain in detail using the information that you have learned in the course to define fair. (4 points)
Expert Answer:
Related Book For
Posted Date:
Students also viewed these economics questions
-
Suppose there are two firms with one demand function. This same (common) demand function is: [from HW] Q = 1,000 40P with MR = 25 0.05Q However, each firm has its own cost function which is...
-
Suppose there are two types of basketball playersblack and white. Suppose also that, on average, black players are no better and no worse than white players. Furthermore, suppose there are only two...
-
Suppose there are two states that do not trade: Iowa and Nebraska. Each state produces the same two goods: corn and wheat. For Iowa the opportunity cost of producing 1 bushel of wheat is 3 bushels of...
-
In July 2009, Malcolm bought a piece of land for 40,000. In June 2016 he sold part of the land for 11,000. This disposal was not caused by a compulsory purchase and was his only disposal of land in...
-
For a large university, you are asked to estimate the demand for tickets to women's basketball games. You can collect time series data over 10 seasons, for a total of about 150 observations. One...
-
A hydrocarbon with an exact molecular mass of 96.0940 exhibits the following spectroscopic data: 1H NMR δ = 1.3 (m, 2 H), 1.7 (m, 4 H), 2.2 (m, 4 H), and 4.8 (quin, J = 3 Hz, 2 H) ppm;...
-
What are the components of a statechart diagram?
-
Seattle Roast Coffee Company produces Columbian coffee in batches of 8,000 pounds. The standard quantity of materials required in the process is 8,000 pounds, which cost $5.00 per pound. Columbian...
-
Sierra Company manufactures soccer balls in two sequential processes: Cutting and Stitching. All direct materials enter production at the beginning of the cutting process. The following information...
-
Update the trial balance for Kreg?s Moving Co. (Figure 4.27 on page 137) for October 31, 201X. Adjustment Data to Update Trial Balance 1. Insurance expired, $550. 2. Moving supplies on hand, $800. 3....
-
Val Hooper deposited $11,600 in the bank on January 1 a few years ago. The bank pays an interest rate of 10% compounded annually, and the deposit is now worth $30,052. For how many years has the...
-
The Henry Store has the following data for inventory: Cost Retail Inventory, January 1 $200,000 $400,000 Purchases for January 360,000 480,000 Sales for January 440,000 The store uses the dollarvalue...
-
A pipe that is 0.460 m long and open at both ends vibrates in the first overtone with a frequency of 726 Hz. What is the speed of sound in the air in this pipe?
-
A projectile is fired with an initial speed of 38.0 m/s at an angle of 43.8 above the horizontal on a long flat firing range Part C Determine the total horizontal distance covered (that is, the...
-
A cylinder piston pump system needs to be designed. The air pressure need to raise from 1 bar to 3 bar in 10 minutes at room temperature (298K) The power to the pump is 100W where the inside of the...
-
A girl is sledding down a slope that is inclined at 30.0 with respect to the horizontal. The wind is aiding the motion by providing a steady force of 113. N that is parallel to the motion of the...
-
Integrity - The commitment of Saint Leo University to excellence demands that its members live its mission and deliver on its promise. The faculty, staff, and students pledge to be honest, just, and...
-
Create an appropriate display of the navel data collected in Exercise 25 of Section 3.1. Discuss any special properties of this distribution. Exercise 25 The navel ratio is defined to be a persons...
-
Does economic theory prove that the free market system is best? Why?
-
What would the Fed have to do in the following instances to keep the interest rate constant? Demonstrate graphically. a. A significant number of people begin to use credit cards for daily...
-
Write the formula for the money multiplier. If the Fed eliminated the reserve requirement, what would happen to the money multiplier and the supply of money?
-
Reconsider the data of Problem 31. Data from Problem 31 The following three investment opportunities are available. The returns for each investment for each year vary, but the first cost of each is...
-
The following three investment opportunities are available. The returns for each investment for each year vary, but the first cost of each is $20,000. Based on a future worth analysis, which...
-
Explain the concept of a control variable and the assumption necessary for a control variable to be effective.
Study smarter with the SolutionInn App