Lecture 16

Lecture 16 - February 20, 2009 Why would a tax be an...

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February 20, 2009 Why would a tax be an incentive for me to die on 1/1/2010 and not 12/31/2009? Estate Tax aka “Death Tax” Government taxes you when you give things away to family in will Why does the most recent stimulus bill allocate $116 billion in reduced tax withholding from paychecks over two years, rather than at one time? Govt tried tax rebates and everyone got a check in the mail. The hope was that people would spend it to revive economy. People paid off debt or put it in the bank though. Small rebates in paychecks make people feel like they have an increase in income to spend Why might a politician prefer a tax rebate to a tax rate reduction? People view their politicians more positively because it seems like they are giving them cash personally. It is more noticeable Politicians doesn’t want to take away tax reduction when things need to go back to normal Tax is like a wedge between the two prices. Suppose the govt puts a $10 tax on MP3 players. How does the price paid by the buyer change? How does the price received by
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This note was uploaded on 09/29/2009 for the course ECON 101 taught by Professor Balaban during the Spring '07 term at UNC.

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Lecture 16 - February 20, 2009 Why would a tax be an...

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