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In: Economics

Congress did not substantially change Federal income tax rates between 1993 and 2000. Visit the Bureau...

Congress did not substantially change Federal income tax rates between 1993 and 2000. Visit the Bureau of Economic Analysis Web site, www.bea.gov (Links to an external site.)Links to an external site.. You can find Table 3.2 on the Federal government's current receipts and expenditures at:

http://www.bea.gov/iTable/iTable.cfm?ReqID=9&step=1 (Links to an external site.)Links to an external site.


By selecting the "Modify" icon, you can select the time period of 1993-2000.

Find the annual revenues from the Federal personal income tax from 1993 to 2000. What happened to those revenues over those years? Given constant tax rates, what do the changes in tax revenues suggest about changes in the shape of the Laffer Curve? If lower (or higher) tax rates do not explain the changes in tax revenues, what do you think does?

Solutions

Expert Solution

S No. Year Annual Revenue from Federal Income Tax(in Millions of Dollar)
1 1993 2021864
2 1994 2170056
3 1995 3327820
4 1996 2653128
5 1997 2976612
6 1998 3300824
7 1999 3572160
8 2000 3982204

The Income tax Revenue generally showed an upward trend

Rahul Sunny answered 1 year ago
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