ECON_138A_HW#1 - to invest c This is tax evasion because...

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Trevor Salas 10/9/11 Homework #1 CHAPTER 3 3. It decreases because that money spent is essentially untaxed, so as the marginal tax rate increases you save more money against the marginal rate and therefore it is “cheaper”. 6.a. [9000-9000(.10)-825]= $7275 b. [9000-(9000-825)(.35)-825]= $5313.75 c. [9000-9000(.25)-825]= $5925 d. [9000-(9000-500)(.40)-825]= $4775 CHAPTER 4 1.a. This is tax evasion because Mr. L is lying about his amount of income. b. This is tax avoidance because he knows that his son is taxed less so he gave him the money
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Unformatted text preview: to invest. c. This is tax evasion because she is lying about when she got income in order to avoid higher tax brackets. 2.a.1700+(51900-17000)(.15)=6935 tax liability, 15% marginal tax rate, and the ave tax rate=6935/51900= 13.36%. b.42449+(186200-174400)(.33)=46343 tax liability, 33% marginal tax rate, and the ave tax rate=46343/186200= 24.89%. c.106637.50+(446300-379150)(.35)= 130140 tax liability, 35% marginal tax rate, and the ave tax rate=130140/446300= 29.16%...
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