45. Explain why it is important as a matter of social policy that the income tax

Question

45. Explain why it is important as a matter of social policy that the income tax function f used for policy that the income tax function f used for Exercises 25-26 of Section 1.5 be an increasing function.

25-26. In 2006 the U.S. federal income tax for a single person with taxable income t dollars (this is the net income after allowable deductions) was f(t) dollars, where f is the function defined as follows:

f(t); {0.1t if 0 is greater than or equal to t less than or equal to 7550
{0.15t-377.5 if 7550 is greater than t less than or equal to 30650
{0.25t-3442.5 if 30650 is greater than t less than or equal to 74200
{0.28t-5668.5 if 74200 is greater than t less than or equal to 154800
{0.33t-13408.5 if 154800 is greater than t less than or equal to 336550
{0.35t-20139.5 if t is greater than 336550

Explanation / Answer

45. If you have an increasing function, then people who make more money get higher taxes than people who make less money. If you had a decreasing function, poorer people would essentially get taxed more than richer people. This just doesn't make economic sense! People who are richer can "afford" to get taxed more. If you were poor, making less than minimum wage, where would you even find the money to pay higher taxes? Everyone loses out...the gov't can't get the tax money to provide services and people on welfare get stuck in a vicious cycle of debt that is out of their control. 25-26...unclear what you are asking based on that info

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