DROP DOWN OPTIONS ARE GIVEN BELOW! THANK YOU SO MUCH IN ADVANCE FOR HELPING ME!
ID: 1204380 • Letter: D
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DROP DOWN OPTIONS ARE GIVEN BELOW! THANK YOU SO MUCH IN ADVANCE FOR HELPING ME!
This is an example of a PROGRESSIVE / PROPORTIONAL / REGRESSIVE income tax.
After paying income taxes, Jack receives $56,000 / $64,000 / $72,000 per year.
If Jack works an additional 10 hours a week (30 hours a week total), his annual income will be $120,000. After paying income taxes, Jack will receive $104,000 / $100,000 / $108,000 per year. In other words, by working an additional 10 hours per week, Jack will receive an additional $32,000 / $28,000 / $36,000.
If Jack works 10 more hours in a week (40 hours a week total), his annual income will further increase to $160,000. After paying income taxes, Jack will receive $132,000 / $136,000 / $140,000 per year. In other words, by working 10 more hours per week, Jack will receive $36,000, $28,000, $32,000 more than what he would receive if he works only 30 hours a week.
As Jack works more, the additional amount he receives from working 10 more hours DOES NOT CHANGE /INCREASES /DECREASES, which means his cost of leisure DECREASES / INCREASES / DOES NOT CHANGE.
2. Income taxes Jack, a resident of Econoland, currently works 20 hours a week and earns an annual income of $80,000. The following table shows income tax rates in Econoland. Annual Income Up to $80,000 From $80,000 to $120,000 Over $120,000 Tax Rate 10% 20% 30% This is an example of aY income tax. After paying income taxes, Jack receives per year. If Jack works an additional 10 hours a week (30 hours a week total), his annual income will be $120,000. After paying income taxes, Jack will receive per year. In other words, by working an additional 10 hours per week, Jack will receive an additional If Jack works 10 more hours in a week (40 hours a week total), his annual income will further increase to $160,000. After paying income taxes, Jack will receive per year. In other words, by working 10 more hours per week, Jack will receive receive if he works only 30 hours a week. more than what he would As Jack works more, the additional amount he receives from working 10 more hours , which means his cost of leisureExplanation / Answer
1. This is an example of progressive income tax.
2. Jack's income = $80000
Tax rate = 10%
therefore, amount of tax income = 80000*10% = $8000
After paynig income tax, jack receives $72000 ( = 80000 - 8000) per year.
3. If jack's income increases to $120000 by working 30 hrs per week,
He'll pay 10% tax for $80000, And for the rest $40000 ( = 120000 - 80000) , he'll pay 20% tax
So tatal amount of tax = 80000 * 10% + 4000 * 20 % = 8000 + 8000 = $16000
After paying taxes , jack will receive $104000 ( = 120000 - 16000) per year. In other words, by working an additional 10 hours per weak , jack will receive an additional amount $28000 ( =104000 ( in part 3) - 72000 (in part 2) ).
4. If jack works for 40 hours, his annual income = $160000.
Tax he would pay = 10% for first 80000 + 20% for next 40000 + 30% for next 40000( = 16000-12000)
amount of tax = 80000*10% + 40000 * 20% + 40000 * 30% = $28000
After paying income taxes, jack will receive $ 132000 ( = 160000 - 28000) per year. In other words, be working for 40 hours per week, jack will receive $ $28000 ( = income with 40 hours of work per week i.e. 132000(part 3) - income with 30 hrs of work per week i.e. 104000 ) more than what he would receive if he works only for 30 hrs a week.
5. As jack works more, the additional amount he receives from working 10 more hours does not change ( in both the parts increase in amount is same i.e. $28000) , which means his cost of leisure does nto change.
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