Problem 2
Suppose George made 20,000 dollar last year and that he lives in the country of Harmony. The way Harmony levies income taxes, each citizen must pay 10 percent in taxes on their first 10,000 dollar in earnings and then 50 percent in taxes on anything else they might earn. So given that George earned 20,000 dollar last year, his marginal tax rate on the last dollar he earns will be entire income will be. a. 50 percent; 50 percent. b. 50 percent; less than 50 percent. c. 10 percent; 50 percent. d. 10 percent; less than 50 percent.
Problem 3
The nation of Upstandia uses kroner for money and its tax code is such that a person making 100,000 kroner per year pays 40,000 kroner per year in income taxes; a person making 200,000 kroner per year pays 70,000 kroner per year in income taxes; and a person making 300,000 kroner per year pays 90,000 kroner per year in income taxes. Upstandia's income tax system is: a. Progressive. b. Regressive. c. Proportional. c. Proportional.
Problem 4
Identify each of the following taxes as being either progressive or regressive. a. Personal income tax. b. Sales taxes. c. Payroll taxes. d. Property taxes.
Problem 5
The efficiency loss of imposing an excise tax is due to: a. Paying a higher price per unit. b. Producing and consuming fewer units.
