Chapter 6: Q. 6.10 (page 140)
Between 2017 and 2018, a small businessperson's income increased from \(200,000 to \)220,000. The annual state income taxes that she paid increased from \(5000 to \)5500. What was her average state income tax rate in each year?
Average tax rates: 2.5%
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Distinguish between average tax rates and marginal tax rates.
Explain the structure of the U.S. income tax system.
Consider Figure 6-3. Suppose that the government raises its sales tax from 4 percent to 6 percent. Does the direction of the effect on government's tax revenue indicated by the figure's dynamic tax analysis accord with the prediction that would have been forthcoming from static tax analysis? Explain briefly.
Why is the main objective of these cross border mergers, whether the US firm is the acquirer or the company that is acquired, to change the legal domicile of the merged firm from the standpoint of income taxation .
What was the company's marginal city income tax rate in 2018? Did this company experience proportional, progressive, or regressive taxation? Explain briefly.
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