Qassume the working income tax benefit tops up a single

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Q. 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. Assume the refundable credit is reduced by 15 percent on the amount of earnings in excess of $10,500.

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

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

c. Let the statutory income tax be a flat rate of 30 % including basic personal exemption of $10,000. Ignore all other taxes and program benefits in the economy. Compute and describe the effective marginal tax rate (EMTR) faced by this personage on earnings ranging from zero to $20,000.

d. Discuss the incentive effects associated with this EMTR program regarding conclusion to join workforce and to increase worked hours like from part-time to full-time.

Reference no: EM13355157

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