Question: Accrual Criterion and Progressivity. Lets consider William, which Salary is 200. Three years ago he bought some shares for 50. This year he sold them

  • Accrual Criterion and Progressivity. Lets consider William, which Salary is 200. Three years ago he bought some shares for 50. This year he sold them for 350. Find the Taxable Income, and tax payable in each case that result from to apply the different techniques to resolve problems of accruel criterion and progressivity in Personal income tax. Compare three cases: doing nothing special, annualized income system (letter b), and Spanish Solution with a proportional tax rate of 19% for capital gains and rest of income at general tax rate scale (letter c)
  • What things would change if we are talking of an irregular income from business, instead of being a capital gain?
  • What things would change if the number of years between the buying and the selling of shares was 5, instead of 3?

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