What is the rate structure of your state income tax

Assignment Help Financial Management

Reference no: EM131869765

1. a. Does your state have an individual income tax? If so, how closely does it conform to the federal tax? Can one deduct the federal tax in computing the state income tax? List some specific ways that the federal and state tax bases differ. What problems, if any, do these differences create in computing your taxes?

b. What is the rate structure of your state income tax? Are the rates progressive, and if so, how does that progressivity compare to the federal income tax rate structure?

2. According to the “benefit principle” of taxation, a business’s tax in a state should be related to the benefits to the business from services provided by the state and local governments. Practically, a firm’s business activity or tax base is usually divided among states based on the state’s share of the firm’s capital, employment, and/or sales. Discuss how well each of those components of the allocation formula might correspond to service benefits. Does a firm with sales (through the Internet or mail order, perhaps) but no employees or capital in a state benefit from any state or local government services?

3. The two most important state taxes are income and general sales taxes, although states also make substantial use of excise taxes, direct business taxes (usually a corporate income tax), and others. List and discuss briefly four factors that might influence a state in choosing between an income and general sales tax. What is the relative reliance in your state on these two taxes? If the relative reliance in your state is different than average, speculate about why that might be so.

4. Suppose that the national government creates a grant program to provide funds to all local governments and, as a result, that all local governments nationally reduce property taxes proportionally. Discuss the economic effects of this property tax change. Which types of individuals are expected to benefit? Will the property tax change lead to a more or less progressive tax structure?

Reference no: EM131869765

Questions Cloud

Exemptions and subsidies to obtain coverage : Analyze the eligibility criteria for exemptions and subsidies to obtain coverage.

The projects are equally risky with cost of capital : The projects are equally risky with a cost of capital of 10%. If the projects are independent, and you have been advised to prioritize the IRR method,

T-bill and commercial paper rate spread : T-Bill and Commercial Paper rate Spread. discuss the changes in the spread, and with emphasis on the different economic cycles in the United States.

What is the difference in the current prices of these bonds : Bond S matures in 5 years and bond L matures in 10 years. What is the difference in the current prices of these bonds?

What is the rate structure of your state income tax : Does your state have an individual income tax? What is the rate structure of your state income tax?

What is the implied one year forward rate : A one-year STRIPS sells at an interest rate of 3.15 percent. What is the implied one year forward rate? Assume the rates are effective annual rates.

Salvage value be treated in net present value calculation : How would the salvage value be treated in a net present value calculation?

Company value-to-book ratio depends heavily : The magnitude of a company's value-to-book ratio depends heavily on its. Companies can grow their equity base by (chose all that apply)

What does intel pay bally : Bally Manufacturing sent Intel Corporation an invoice for machinery with a $13,300 list price. What does Intel pay Bally on August 12?

User Account

All Pages