Assignment: REGRESSIVE.

1a. Based on what you learned in the Johnny2 (below), explain how it could be that billionaires pay a lower effective tax rate than middle-class people.

( Johnny earned $100,000 in salary and $6,000 in interest income during the year. Johnnys employer withheld $11,000 of federal income taxes from Johnnys paychecks during the year. Johnny has one qualifying dependent child who lives with him. Jeremey qualifies to file as head of household and has $23,000 in itemized deductions.

Assume that in addition to the original facts ($106,000 of ordinary gross income), Johnny sold Amazon shares that he bought for $6,000 on 1/1/18 for $10,000 on 12/31/19. You may use the IRS instructions to form 1040 (2019). )

1b. Why is the title of this "regressive", and how does it relate to taxes?

1c. What is the opposite of regressive in the context of taxes? Explain

1d. What are two other types of taxes, besides income taxes (i.e. Form 1040) that are regressive and why?

1.1 Other type A

1.2 Other type B

Thank you.

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