The Haig-Simons comprehensive income definition defines taxable resources as: A.

Question

The Haig-Simons comprehensive income definition defines taxable resources as: A. income earned from participating in the labor market. B. the increase in an individual's wealth C. an individual's actual consumption for the year. 4. D. an individual's potential annual consumption. There is a 50% income tax in a society with only two individuals. Both individuals have pre-tax incomes of $50,000. In period 1, there is no tax deduction, and Harry gives $5,000 to charity while Sally gives $8,000 to charity. In period 2, the government makes charitable donations tax deductible and Harry gives S6,000 and 5. Sally gives $12,000 The marginal impact of the tax break was the inframarginal impact of the tax break was A. $2,500; $13,000 B. $2,500; $6,500 C. $5,000; $13,000 D. $5,000; $6,500

Explanation / Answer

An individual's ability to pay taxes, equal to the total consumption during a year added to any addition to the wealth stock is taxable resources according to Hai-Simon income definition. Therefore the answer is

(D) an individual's potential annual consumption

5. (C) 5000 dollar ; 13000 dollar

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