Hello, I would need a little help with this assignment.?
Please only mark the question as answered, if you have completed the answer or are going to post it within the next 4 hours.
Thank you in advance for your help.
Assignment: Tax and Income Distribution
1. Consider the following data on income distribution from two years:
First 20% 2nd 20% 3rd 20% 4th 20% Top 20% 1990 3.7% 1980 4.1% 12.0%
9.7% 16.1% 22.3%
15.4% 27.5% 45.9%
43.3% A. Plot these points and draw a Lorenz curve for each of these two years. As a
reference, include a Lorenz curve in which all quintiles earn the same amount of income. Label
your axes clearly. (3 points)
B. What happened to the share of income earned by the poorest quintile between 1980 and
1990? (3 points)
C. What happened to the share of income earned by the richest quintile between 1980 and
1990? (3 points)
D. What happened to the second and third quintiles between 1980 and 1990? (1 point)
E. In your opinion, did income distribution become more or less equitable between 1980 to
1990? (1 point)
2. Income distribution tells only part of the story of how well off a household is. Wealth, a
measure of a household?s well being, includes things like the assets the household own and the
possession of human capital, which can increase a household?s earning potential. Considering
the three households below, who have the same annual income,
answer the following questions using only the information given.
I. A seventeen-year old high school dropout with no financial assets
II. A married couple with a large debt and small incomes who are in their final semester of law
III. A retired couple who invested a lot of money while they were working and now have large
A. How does the wealth of these three households differ? (3 points)
B. If all income is taxed at a flat rate of 10%, how would the amount of tax paid differ between
these three households?(3 points)
C. If, instead, a tax was placed on wealth (everything the family owned) how would the
amount of tax paid differ between these three families? (3 points)
3. Consider the following income tax system. A person pays no tax on the first $10,000 of
income and then pays a tax rate of 20% on all additional income.
A. Calculate the amount of tax paid by a person with an income of $20,000. (3points)
B. Calculate the amount of tax paid by a person with an income of $100,000. (3 points)
C. Is this a progressive, regressive, or proportional tax? Explain. (4 points)
D. Imagine that you want to change this tax system to make the distribution of after-tax
income (what people have to spend after paying their taxes) more equitable. Explain how you
might do this without changing the total amount of money the government collects and offer
an example. (2 points) 4. The amount a household spends in a year depends, in part, on their income. Consider the
following data for four households (and be sure to complete the last two columns):
$100,000 Spending $12,000
$75,000 _______ Tax Paid
_______ Tax as a % of ________________
________________ A. Calculate the amount each household will pay in taxes if a 12% sales tax is applied to all
spending. (2 points)
B. Calculate the tax as a percent of income that each household will pay in this case. (2
C. Based on these four households, is this a progressive tax? Explain. (4 points)
D. Generally, a sales tax is rarely applied to such things as food and rent. Explain why these
exceptions make sales taxes more progressive. (4 points)
5. Automobiles are taxed in many different ways. Revenues from automobile taxes are
typically used for road building and maintenance. For each of the following automobile taxes,
explain why it?s most clearly an example of the benefit principle of taxation or an example of
the ability to pay principle of taxation. If the answer is more ambiguous than that, explain why.
A. A tax on each gallon gasoline purchased (4 points)
B. An annual registration fee based on the value of the automobile (4 points)
C. An annual registration fee based on the number of miles the car has been driven in the past
year (4 points)
D. An annual licensing fee of $50 per automobile (4 points)
This question was answered on: Sep 18, 2020
Buy this answer for only: $15
This attachment is locked
We have a ready expert answer for this paper which you can use for in-depth understanding, research editing or paraphrasing. You can buy it or order for a fresh, original and plagiarism-free copy from our tutoring website www.aceyourhomework.com (Deadline assured. Flexible pricing. TurnItIn Report provided)
Pay using PayPal (No PayPal account Required) or your credit card . All your purchases are securely protected by .
About this QuestionSTATUS
Sep 18, 2020EXPERT
GET INSTANT HELP/h4>
We have top-notch tutors who can do your essay/homework for you at a reasonable cost and then you can simply use that essay as a template to build your own arguments.
You can also use these solutions:
- As a reference for in-depth understanding of the subject.
- As a source of ideas / reasoning for your own research (if properly referenced)
- For editing and paraphrasing (check your institution's definition of plagiarism and recommended paraphrase).
NEW ASSIGNMENT HELP?
Order New Solution. Quick Turnaround
Click on the button below in order to Order for a New, Original and High-Quality Essay Solutions. New orders are original solutions and precise to your writing instruction requirements. Place a New Order using the button below.
WE GUARANTEE, THAT YOUR PAPER WILL BE WRITTEN FROM SCRATCH AND WITHIN YOUR SET DEADLINE.