Reference no: EM13961338
The US Earned Income Tax Credit has been described as one of the most successful elements of US antipoverty public policy, especially as it directs benefits towards the working poor. For the 2010 tax year, the EITC worked approximately as follows. Low-wage workers received additional income from the federal government depending on how much they earned and how many children they had. Consider an individual with one child:
*There was no credit if nothing was earned
*The credit equaled $0.34 per dollar earned, and peaked at around $3050, when worker earned $8950.
*It remained at $3050 until the worker earned around $16450.
*It was phased out gradually by $0.16 per dollar earned, until eliminated completely if the worker earned $35,535 or more per year.
a) Assuming the worker faces no other taxes, graph the budget constraint for a typical worker earning a wage of W per hour.
b) Analyze how the imposition of the EITC affects hours of labour supplied. Assuming the
substitution effect is larger than the income effect for a low-wage worker, does the credit increase hours worked for all those who are eligible? Why or why not?
c) Analyze the impact of the EITC on an individual's labour force participation assuming that the individual was not working in the absence of the EITC.
d) The Canadian EITC-type program is called the Working Income Tax benefit (WITB). The WITB provides no credit until labour earnings reach a minimum of $3000. The benefit is then calculated on the basis of "earnings minus $3000". Illustrate how this feature changes the budget constraint.
e) What would happen to the work incentive effects of the EITC if a similar $3000 threshold was added to the EITC (holding everything else constant)?
|
How valuable is research in the area of sexual communication
: How valuable is research in the area of sexual communication? What are we able to ascertain about what works and does not work in relationships
|
|
Below is a list of the 14 items and the preferences of anjou
: Below is a list of the 14 items and the preferences of Anjou and Bharat for each. For simplicity, we have labeled the items in order of Anjou's preferences. Here item 1 (A) is the best and item 14 (N) is the worst for Anjou. In contrast item 14 (N) i..
|
|
Wallace garden supply
: Data collected on the yearly demand for 50-pound bags of fertilizer at Wallace Garden Supply are shown in the following table:
|
|
Describe what a chinese wall is and which u.s. regulator
: Describe what a Chinese Wall is and which U.S. regulator would be concerned with issues involving the wall.
|
|
The us earned income tax credit
: The US Earned Income Tax Credit has been described as one of the most successful elements of US antipoverty public policy, especially as it directs benefits towards the working poor. For the 2010 tax year, the EITC worked approximately as follows.
|
|
Find the fractional number of molecules of a gas
: Find the fractional number of molecules of a gas having speeds between vm and 1.05vm where vm = √2kT/m and is denoted as the most probable speed.
|
|
Global mobility program influenced by global assignments
: How is an effective global mobility program influenced by global assignments, adjustment to foreign cultures, work role factors, expatriation- repatriation cycle and support practices of a particular country?
|
|
Explaining how and why you see things differently
: Respond to at least two of your colleagues' posts (Note: 2 of my colleague's responses are copied below, I need one response for each person) in at least one of the following ways:
|
|
Job performance-motivation-ability-situational constraints
: What is the relationship between job performance, motivation, ability, and situational constraints? How can managers use the basic principles of needs and rewards to motivate employees? What should managers be concerned about with regard to perceptio..
|