Suppose that your employer offered you $4,000 in cash instead of health insurance coverage. Health insurance is

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Suppose that your employer offered you $4,000 in cash instead of health insurance coverage. Health insurance is excluded from state income taxes and federal income taxes. (To keep the problem simple, we will ignore Social Security and Medicare taxes.) The cash would be subject to state income taxes (8%) and federal income taxes (28%). How much would your after-tax income go up if you took the cash rather than the insurance?

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