Question: Suppose the current progressive income tax structure is scrapped and
Suppose the current progressive income tax structure is scrapped and replaced by a 15 percent tax on all income with no exemptions or deductions allowed except that the first $10,000 of income will not be subject to taxation. Explain why this so-called flat-rate tax is really still a progressive-rate structure. How will the elimination of tax preferences affect resource allocation and prices in markets? How could the reform, if it really simplified the complexity of the tax code, save resources? What are some common objections to the flat-rate tax?
Answer to relevant QuestionsSuppose federal, state, and local governments in the United States were to engage in a massive campaign to deal with AIDS, drug abuse, and other health-related problems. The increase in government medical spending would ...The EPA wants to reduce emissions of sulfur dioxides from electric power-generating plants by 20 percent during the next year. To achieve this goal, the EPA will require each power-generating plant in the nation to reduce ...A corporation has $7 million in equity. During the tax year it takes in $4 million in receipts and earns $2 million in capital gains from sale of a subsidiary. It incurs labor costs of $1 million, interest costs of $250,000, ...Suppose two workers earn labor incomes of $20,000 per year in each of three tax accounting periods. One worker saves 20 percent of her labor earnings in each of the first two periods and spends all her savings and ...Suppose, as a result of the imposition of a 5 percent local property tax, the rent on a parcel of property increases from $12,000 to $12,500 per year. Assuming that the current rate of discount is 8 percent and that the ...
Post your question