at what income is the credit reduced to zero, Public Economics

Assume the Working Income Tax Benefit tops up a single individual's income by 25 percent of the amount that employment earnings exceed $3000, up to a maximum payment of $950. Suppose the refundable credit is reduced by 15 percent on the amount of earnings in excess of $10,500.

a.  Then over what range of earnings is the credit at its maximum value?

b.  At what income is the credit reduced to zero?

c.  Let the statutory income tax be a flat rate of 30 percent, with a basic personal exemption of $10,000. Ignore all other taxes and program benefits in the economy. Calculate and explain the effective marginal tax rate (EMTR) faced by this individual on income ranging from zero to $20,000.

d.  Discuss the incentive effects associated with this EMTR schedule, regarding the decision to join the workforce and to enhance  hours worked, say, from part-time to full-time. 

Posted Date: 3/16/2013 1:07:43 AM | Location : United States

Related Discussions:- at what income is the credit reduced to zero, Assignment Help, Ask Question on at what income is the credit reduced to zero, Get Answer, Expert's Help, at what income is the credit reduced to zero Discussions

Write discussion on at what income is the credit reduced to zero
Your posts are moderated
Related Questions
Suppose there are two inputs in the production function, labor (L) and capital (K), which can be combined to produce Y units of output according to the following production functio

1.Suppose you are interested in assessing the value of a statistical life for individuals. You ?nd a dataset on risk and wages. You consider running the following OLS regression.

Explain the stages and various coordination mechanism nvolved in policy processes

In planning activities how are the decision arrived? what are the different stages of analysis? which factors can be ignored and why? state the manner in which a degree of success

general equilibrium analysis of taxation in shven and whalley (1984) article

Discuss the basic features of international policy coordination. There may be two sources of interdependence between national economic policies, club goods and horizontal spill

The fragmentation and redundancies of the U.S federal system are expensive in terms of coordination and personnel costs. Would you favor or oppose greater consolidation? Why or why

what is multinational? how can they help developing economies?

critically examine the statement that privatization can always decentralize economic power