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quanda12 - Chapter 12 1 a Fill out the table below assuming...

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Practice Questions to accompany Mankiw & Taylor: Economics 1 Chapter 12 1. a. Fill out the table below assuming that the government taxes 20 percent of the first €30,000 of income and 50 percent of all income above €30,000. Answer: b. Compare the taxes for someone earning €10,000 to those of someone earning €50,000 in part (a) above. Is this tax system progressive, regressive, or proportional? Explain. Answer: Progressive because the average tax rate for a person earning €50,000 exceeds the average tax rate for a person earning €10,000. That is, the rich pay a larger fraction of their income than do poor people.
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Practice Questions to accompany Mankiw & Taylor: Economics 2 2. a. Fill out the table below assuming that the government imposes a lump- sum tax of €6,000 on all individuals. Answer: b. Compare the taxes for someone earning €10,000 to those of someone earning €50,000 in part (a) above. Is this tax system progressive, regressive, or proportional? Explain Answer:
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