Which of the following is an example of proportional tax?
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Which of the following is an example of a progressive tax system?a. Social Security Taxb. A sales taxc. A proportional taxd. U.S. Federal Income Taxe. None of the Above
Which of the following taxes are not equivalent to each other? Assume that each is a proportional tax.
A. A value-added tax and a consumption tax
B. A general sales tax and an income tax
C. A wage tax and a consumption tax
D. An income tax and a value-added tax
Assume that, without taxes, the consumption schedule for an economy is as shown in the first two columns of the table below. The MPC without taxes is 0.8. Suppose a proportional tax with a 10 percent tax rate is imposed instead of the regressive tax.
a. Calculate the new consumption schedule.
GDP, Billions
Consumption Before Tax, Billions
Tax Rate, Billions
Disposable Income, Billions
Consumption After Tax, Billions
$100
120
200
300
280
400
360
500
440
600
520
700
b. What are the MPC (tax inclusive) and the multiplier?
MPC for the proportional tax consumption schedule is ________.
The multiplier for the proportional tax consumption schedule is ________.