When taxes induce people to change their behavior—such as inducing Jane to buy less pizza—the taxes cause deadweight losses and make the allocation of resources less efficient. As we have already seen, much government revenue comes from the individual income tax in many countries. In a case study in Chapter 8, we discussed how this tax discourages people from working as hard as they otherwise might. Another inefficiency caused by this tax is that it discourages people from saving.

Consider a person 25 years’ old who is considering saving $1,000. If he puts this money in a savings account that earns 8 percent and leaves it there, he would have $21,720 when he retires at age 65. Yet if the government taxes one-fourth of his interest income each year, the effective interest rate is only 6 percent. After 40 years of earning 6 percent, the $1,000 grows to only $10,290, less than half of what it would have been without taxation. Thus, because interest income is taxed, saving is much less attractive.

Some economists advocate eliminating the current tax system’s disincentive toward saving by changing the basis of taxation. Rather than taxing the amount of income that people earn, the government could tax the amount that people spend.

Under this proposal, all income that is saved would not be taxed until the saving is later spent. This alternative system, called a consumption tax, would not distort people’s saving decisions.

Various provisions of the current tax code already make the tax system a bit like a consumption tax. Taxpayers can put a limited amount of their saving into special accounts—such as Individual Retirement Accounts and 401(k) plans—that escape taxation until the money is withdrawn at retirement. For people who do most of their saving through these retirement accounts, their tax bill is, in effect, based on their consumption rather than their income.

European countries tend to rely more on consumption taxes than does the United States. Most of them raise a significant amount of government revenue through a value-added tax, or a VAT. A VAT is like the retail sales tax that many U.S. states use, but rather than collecting all of the tax at the retail level when the consumer buys the final good, the government collects the tax in stages as the good is being produced (that is, as value is added by firms along the chain of production). Various U.S. policymakers have proposed that the tax code move further in direction of taxing consumption rather than income. In 2005, economist Alan Greenspan, then Chairman of the Federal Reserve, offered this advice to a presidential commission on tax reform: “As you know, many economists believe that a consumption tax would be best from the perspective of promoting economic growth—particularly if one were designing a tax system from scratch—because a consumption tax is likely to encourage saving and capital formation. However, getting from the current tax system to a consumption tax raises a challenging set of transition issues.”

Q1: What should be taxed - Personal Income or Personal Consumption and why? Provide your opinion based on the case given below. (200 words)                                                                                          [2.5 Marks]

Q2: How may it affect Saudi Economy if an income tax is imposed in KSA? (200 words)           [2.5 Marks]

Assignment 2-Case Study-Chapters: 7, 8, 9 & 12 : - [5 Marks]

Case Study

When taxes induce people to change their behavior—such as inducing Jane to buy less pizza—the taxes cause deadweight losses and make the allocation of resources less efficient. As we have already seen, much government revenue comes from the individual income tax in many countries. In a case study in Chapter 8, we discussed how this tax discourages people from working as hard as they otherwise might. Another inefficiency caused by this tax is that it discourages people from saving.

Consider a person 25 years’ old who is considering saving $1,000. If he puts this money in a savings account that earns 8 percent and leaves it there, he would have $21,720 when he retires at age 65. Yet if the government taxes one-fourth of his interest income each year, the effective interest rate is only 6 percent. After 40 years of earning 6 percent, the $1,000 grows to only $10,290, less than half of what it would have been without taxation. Thus, because interest income is taxed, saving is much less attractive.

Some economists advocate eliminating the current tax system’s disincentive toward saving by changing the basis of taxation. Rather than taxing the amount of income that people earn, the government could tax the amount that people spend.

Under this proposal, all income that is saved would not be taxed until the saving is later spent. This alternative system, called a consumption tax, would not distort people’s saving decisions.

Various provisions of the current tax code already make the tax system a bit like a consumption tax. Taxpayers can put a limited amount of their saving into special accounts—such as Individual Retirement Accounts and 401(k) plans—that escape taxation until the money is withdrawn at retirement. For people who do most of their saving through these retirement accounts, their tax bill is, in effect, based on their consumption rather than their income.

European countries tend to rely more on consumption taxes than does the United States. Most of them raise a significant amount of government revenue through a value-added tax, or a VAT. A VAT is like the retail sales tax that many U.S. states use, but rather than collecting all of the tax at the retail level when the consumer buys the final good, the government collects the tax in stages as the good is being produced (that is, as value is added by firms along the chain of production). Various U.S. policymakers have proposed that the tax code move further in direction of taxing consumption rather than income. In 2005, economist Alan Greenspan, then Chairman of the Federal Reserve, offered this advice to a presidential commission on tax reform: “As you know, many economists believe that a consumption tax would be best from the perspective of promoting economic growth—particularly if one were designing a tax system from scratch—because a consumption tax is likely to encourage saving and capital formation. However, getting from the current tax system to a consumption tax raises a challenging set of transition issues.”

Q1: What should be taxed - Personal Income or Personal Consumption and why? Provide your opinion based on the case given below. (200 words)                                                                                          [2.5 Marks]

Q2: How may it affect Saudi Economy if an income tax is imposed in KSA? (200 words)           [2.5 Marks]

I need diffrante answer!

ECON 201

Case Study

When taxes induce people to change their behavior—such as inducing Jane to buy less pizza—the taxes cause deadweight losses and make the allocation of resources less efficient. As we have already seen, much government revenue comes from the individual income tax in many countries. In a case study in Chapter 8, we discussed how this tax discourages people from working as hard as they otherwise might. Another inefficiency caused by this tax is that it discourages people from saving.

Consider a person 25 years’ old who is considering saving $1,000. If he puts this money in a savings account that earns 8 percent and leaves it there, he would have $21,720 when he retires at age 65. Yet if the government taxes one-fourth of his interest income each year, the effective interest rate is only 6 percent. After 40 years of earning 6 percent, the $1,000 grows to only $10,290, less than half of what it would have been without taxation. Thus, because interest income is taxed, saving is much less attractive.

Some economists advocate eliminating the current tax system’s disincentive toward saving by changing the basis of taxation. Rather than taxing the amount of income that people earn, the government could tax the amount that people spend.

Under this proposal, all income that is saved would not be taxed until the saving is later spent. This alternative system, called a consumption tax, would not distort people’s saving decisions.

Various provisions of the current tax code already make the tax system a bit like a consumption tax. Taxpayers can put a limited amount of their saving into special accounts—such as Individual Retirement Accounts and 401(k) plans—that escape taxation until the money is withdrawn at retirement. For people who do most of their saving through these retirement accounts, their tax bill is, in effect, based on their consumption rather than their income.

European countries tend to rely more on consumption taxes than does the United States. Most of them raise a significant amount of government revenue through a value-added tax, or a VAT. A VAT is like the retail sales tax that many U.S. states use, but rather than collecting all of the tax at the retail level when the consumer buys the final good, the government collects the tax in stages as the good is being produced (that is, as value is added by firms along the chain of production). Various U.S. policymakers have proposed that the tax code move further in direction of taxing consumption rather than income. In 2005, economist Alan Greenspan, then Chairman of the Federal Reserve, offered this advice to a presidential commission on tax reform: “As you know, many economists believe that a consumption tax would be best from the perspective of promoting economic growth—particularly if one were designing a tax system from scratch—because a consumption tax is likely to encourage saving and capital formation. However, getting from the current tax system to a consumption tax raises a challenging set of transition issues.”

Q1: What should be taxed - Personal Income or Personal Consumption and why? Provide your opinion based on the case given below. (200 words)                                                                                          [2.5 Marks]

Q2: How may it affect Saudi Economy if an income tax is imposed in KSA? (200 words)           [2.5 Marks]

Question 20

A regressive tax:

Question 21

The two sources that contribute roughly 80 percent together of total tax revenues are:

Question 22

The marginal tax rate refers to the tax rate charged on the:

Question 23

A payroll tax is a tax on the:

Question 24

FICA, the tax that supports Medicare and Social Security, is generally:

Explain relevant saving and insurance plans in Canada. What are factors affecting individual saving plans? What are determinants that are to be considered before investing into any individual saving plan. Use real case references to support your content.

The percent daily value on a Nutrition Facts label is based on a(n)

• diet of 2,500 calories each day.

• BMI of 22.

• individual weighing 175 pounds.

• individual weighting 120 pounds.

• diet of 2,000 calories each day.

Does Dracula--from what we have read--have a protagonist? If so, who is it? Jonathan? Arthur? Mina? Dr. Seward? Van Helsing? ... Dracula? Pick one single passage from the text to explain either a) who the protagonist is, or b) why there isn't one.

a) Find the optimum purchases of X1 and X2 for the following information: U = utility = X4 1 X2, P1 = price of X1 = 4, P2 = price of X2 = 5, and y = income = 25.

Calculate also the maximum level of utility.

b) Assume the individual receives 4 of X2 as a gift. The individual can sell his gift if he wishes. Find his new optimum purchases of X1 and X2. Explain also diagrammatically.

c) Now assume that the individual cannot sell his gift. Find his optimum purchases of X1 and X2. Is the individual happier in case (b) or in case (c)? Explain and prove your answer. d) Suppose in case (a) the price of X2 falls to P2 = 4. What is the consumer surplus gain for the new optimum purchase of X2?

1. Having reviewed the various changes that apply to individual taxpayers as a result of the 2017 Tax Cut & Jobs Act, throughout the semester, I feel that that the most significant aspect that will affect the average individual taxpayer positively is ______________. Please post your thoughts on this topic, support your opinion with the specific change in the law and why you feel this particular issue will have the broadest economic effect.

2. Having reviewed the various changes that apply to individual taxpayers as a result of the 2017 Tax Cut & Jobs Act, throughout the semester, I feel that the most significant aspect that will affect the average individual taxpayer negatively is ______________. Please post your thoughts on this topic, support your opinion with the specific change in the law and why you feel this particular issue will have the broadest economic effect.

Phelps was suspicious of the tradeoff suggested by the Phillips curve. He thought that sensible, forward-looking people should not change their behavior just because the prices on all the price tags in the economy increased at 4% per year instead of at 2% per year.

Phelps started his analysis by asking what determines the unemployment rate. One of the key points he recognized was that unemployment is the inevitable consequence of an economy in which some firms go out of business each month and some workers quit their jobs each month. Once a worker is out of a job, the individual will take some time searching for the next one.

Consider the following scenario.

Picture an economy with 100,000 workers in its labor force. The unemployment rate is simply the number of unemployed workers divided by the number of workers in the labor force. At the beginning of January, the unemployment rate is 4.76%, so 4,760 people in the labor force are unemployed.

Suppose that in January, 10% of the workers who were unemployed at the beginning of the month start new jobs. This means that _____(476 or 47,600) people leave the unemployment category in January.

Suppose that in January the job separation rate equals 1%. That is, 1% of the people who were employed at the beginning of the month are laid off or quit. This means ____ ( 95,240 or 952) people are added to the unemployment category that month. (Hint: Round your answer to the nearest whole number.)

Assume the size of the labor force does not change from January to February. Considering that the job separation rate is 1% during January, and 10% of unemployed workers find new jobs, the unemployment rate at the beginning of February will be approximately ____ (8.96%, 4.28%, 5.24%, 2.64%, 4.76&, 5.12%) .(Hint: Round your answer to the nearest hundredth.)

Generalizing from your calculations for January, if in February, the job separation rate is 1%, and 10% of unemployed workers get jobs, the unemployment rate at the end of February will ____ (increase, decrease, or remain the same) .

Suppose that at the beginning of August, the unemployment rate is 4.76%, however, this month just 0.1% of the employed workers become unemployed.

Suppose that in August, 10% of the workers who were unemployed at the beginning of the month find new jobs. The unemployment rate be at the beginning of September will be ____ (1.12%, 4.38%, 2.64%, 0.84%, 4.76%, 1.96%) . (Hint: Round your answer to two decimal places.)

Now suppose that in September, the job separation rate returns to normal: 1% of the workers who were employed at the beginning of the month become unemployed. As always, 10% of the workers who are unemployed find jobs during the month.

In the last question, you calculated a lower unemployment rate for the beginning of September. Use the numbers of employed workers and unemployed workers implied by this unemployment rate to calculate how many employed workers become unemployed during September and how many unemployed workers find jobs during September.

The unemployment rate at the end of September is ____ (4.25%, 2.75%, 3.5%, 8.5%, 5%) .