Suppose that Aviva can earn supplemental in-come by working overtime. She intends to use any income she earns to buy shares of stock in a corporation, with the intention of leaving the shares to her children in her will. She is 60 years old and expects to live 25 more years. Aviva faces the following marginal tax rates: a 35 percent combined income and payroll tax, a 35 percent corporate tax paid by the firm whose stock she buys, a 15 percent tax on the dividends earned ( there are no capital gains), and a 45 percent tax on her estate when she dies. If the before- tax return on the stock is 7 percent, how much will Aviva’s children get on every dollar Aviva earns in supplemental income? How does this compare to their gain if there were no taxes?
Answer to relevant QuestionsDuring 2011, the inflation rate in the United Kingdom was about 3.6 percent. During that year, the national debt of the United Kingdom was about £ 940 billion. Discuss the implications of these facts for measuring ...In the 1970s, researchers at the RAND Corporation conducted a famous social experiment to investigate the relationship between health insurance coverage and health care utilization. In this experiment, samples of individuals ...Comedian Jay Leno once took his show to Michigan and gave away free tickets so that out- of-work individuals could attend. He later objected when he discovered that someone tried to sell his free ticket on eBay, and eBay ...Both state and federal governments have regulations with respect to the amount of information that pharmaceutical companies have to provide about the health risks of their products. A case brought before the Supreme Court in ...Assume that the towns of Belmont and Lexington have different demand curves for firefighters and can hire firefighters at the same constant marginal cost. Suppose that historically their state government has required the two ...
Post your question