1/ Assume that the government imposes a 30% tax on your income and deducts $8,00

Question

1/ Assume that the government imposes a 30% tax on your income and deducts $8,000 from the result. Under a negative income tax scheme, if you earn $30,000 a year, you will A/receive a tax credit of $1,000. B/ receive a tax credit of $8,000. c/have a tax liability of $1,000.d/ have a tax liability of $8,000.

2/Earned Income Tax Credits

3/Alex Rodriguez made $27.5 million a year in 2007. This large disparity in salary compared to the average player in the major league is because

4/Wage discrimination and the earnings gap are often misinterpreted because

5/When comparing the income inequality ratio (top 20% / bottom 20%) across nations we can say that the United States has a lower ratio compared to Namibia because

Explanation / Answer

1.  A/receive a tax credit of $1,000.

2. ecrease tax liability and are phased out.. EIC reduces tax liability and are slowly phasing out.

3. The small difference in the income is due to the difference in marginal talent only.

4. of human capital differences between new entrants and mid-career workers.

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