Taxation in America is always a \"hot topic.\" In designing a taxation system a.
ID: 1171808 • Letter: T
Question
Taxation in America is always a "hot topic." In designing a taxation system
a. what are the basic principles to be considered?
b. how is the burden of a tax calculated?
c. list the three basic tax burdens (Hint: one of them is "progressive.") and list examples of each.
d. if the government creates a tax on wealth that taxes the first $50,000 of assets a person owns at 1%, the next $50,000 at 2%, the third at 3% and so on, what type of tax burden is that? How much tax would you owe if you had $125,000 in assets (car, personal property and small home)?
Explanation / Answer
Part A: In designing a taxation system what are the basic principles to be considered?
In designing a taxation system the basic principles to be considered by a government includes:
Part B: How is the burden of taxation calculated?
The burden of taxation can be measured in two ways:
The advantage of calculating the total burden of a tax as the change in surplus generated by that tax rather than tax payments is that tax payments are often made by persons or firms who are little affected by a given tax.
Part C: List the Three Basic Tax Burdens?
Tax systems fall into three main categories within the tax code: regressive, proportional and progressive taxes.
The U.S. federal tax system and local and state tax systems use all three types to collect tax revenue.
Part D: if the government creates a tax on wealth that taxes the first $50,000 of assets a person owns at 1%, the next $50,000 at 2%, the third at 3% and so on, what type of tax burden is that? How much tax would you owe if you had $125,000 in assets (car, personal property and small home)?
This is an example of progressive tax. The amount of tax paid is shown in the below table.
Inome Slab
Taxable Amount
Tax Rate
Income Tax
50000
50,000
1%
500
50000 - 100000
50,000
2%
1000
10000 - 1,50000
25,000
3%
750
Net Tax to be paid
2250
Inome Slab
Taxable Amount
Tax Rate
Income Tax
50000
50,000
1%
500
50000 - 100000
50,000
2%
1000
10000 - 1,50000
25,000
3%
750
Net Tax to be paid
2250
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.