Requirment:

He specific directions for the assignment are in the document. The purpose of the assignment is to raise enough taxes to fund one of the improved levels of government services using a progressive tax structure. A progressive tax structure means as income increases the percentage of tax also increases. The simplest way to complete this assignment is to create an excel workbook. If you download the Moneyland document in Word you will be able to copy and paste income and wealth information from the document into a new excel workbook. Remember to include the number of adults in each group when performing your calculations. Also, remove the notation 'retired' from the cell when you paste the group information into you workbook. If you do not remove this notation excel will not perform the operation, and you will receive an error message. Your are only required to use the information in Stage 1 to complete the assignment. you are required to find tax rate on average wealth and income, amount of tax collected in average wealth and income.

Moneyland is an independent country with 1,000 adult residents. The government of Moneyland has reached a crisis. The tax code was so complicated, so full of loopholes, and so unfair, that that the residents of Moneyland have agreed to scrap their current system of taxation totally and start over. They would like a system of taxation that seems reasonably fair and will pay for their government services without creating deficits. Some people would even like to generate new tax revenues so that they could have improved government services.

Stage 1 Assignment

Your group will make a proposal that would raise enough taxes to fund either the current, or one of the improved levels of government services using a progressive tax structure. A progressive tax structure means as income increases the percentage of tax also increases.

Options for Government Services Level

Current Level of Services	Somewhat Improved Services	Much improved Services
Cost: $20,000,000	Cost: $25,000,000	Cost: $30,000,000
Mediocre schools (32 students per class, old books, dirty bathrooms) Adequate police and fire Long lines at govt offices Potholes take a long time to get repaired, little public transportation Publicly provided health insurance only for very poor Minimal retirement benefits Adequate military Barely enough food safety and pollution control inspectors	Decent schools (27 students per class, new books, dirty bathrooms) Adequate police and fire Medium lines at govt offices Potholes get repaired promptly, better public transportation Publicly provided health insurance for very poor plus very old Slightly better retirement benefits Adequate military Enough inspectors, but not enough projects to prevent problems before they occur	Good schools (20 students per class, new computers, clean bathrooms) Adequate police and fire Short lines at govt offices Good roads, good public transportation Publicly provided health insurance very poor, very old, plus minimal services for all Helpful but not complete retirement benefits Better equipped military Inspectors and proactive problem prevention measures funded

The People of Moneyland

Wealth is the value of all of your belongings (houses, cars, stocks, bonds, savings accounts, paintings, businesses, etc.) minus your total debt. So a person who owns a $400,000 house with a $300,000 mortgage on it, has a car worth $4,000, $80,000 worth of student loans, $4,000 worth of credit card debt, and $50,000 of retirement savings would have wealth of $400,000 - $300,000 + $4,000 - $80,000 - $4,000 + $50,000 = $70,000. Income is the amount of new money coming into a persons life each year, usually made from going to work. Sometime income could be interest from investments, rental income, or small business income from a sole proprietorship.

The 1,000 adults of Moneyland can be roughly grouped by their wealth and income as shown below.

Group	Number of People	Average Wealth	Average Income
Group 1	100	$0	$5,000
Group 2	100	$0	$10,000
Group 3	100	$5,000	$15,000
Group 4	100	$10,000	$25,000
Group 5	100	$30,000	$40,000
Group 6	100	$50,000	$50,000
Group 7	100	$60,000	$60,000
Group 8	100 (retired)	$300,000	$20,000
Group 9	100	$100,000	$80,000
Group 10	80	$200,000	$100,000
Group 11	17	$1,000,000*	$300,000
Group 12	3	$20,000,000*	$2,000,000