1. Identify with an "X" whether each of the taxes below are likely to be progressive, regressive, or proportional. Progressive Proportional Regressive A sales tax charged on consumer goods Gift taxes A 10% tax on all income Cigarette and alcohol taxes Estate Taxes US income taxes 2. Take a look at the tables below. Each table shows the income earned and taxes paid by citizens within 3 different economies. Identify each country's tax system as generally progressive, proportional, or regressive. Country A Country B Country C Income Tax Income Tax Income Tax $10,000 $1,500 $22,000 $5,000 $15,000 $1,000 $40,000 $6000 $63,000 $5,000 $36,000 $3,000 $130,000 $19,500 $85,000 $5,000 $125,000 $18,750 $300,000 $45,000 $130,000 $5,000 $350,000 $70,000 3. Take a look at the graph below showing 3 different Lorenz curves. Assume the economy's current income distribution is represented in Lorenz curve B. What will be the most likely new Lorenz curve (Curve A, B, or C) following each of the following events? There is a new progressive tax There is a new regressive tax There is a new proportional tax There is an increase in transfer payments Share of Income % Curve A Curve B There is a decrease in transfer payments Curve C The Gini coefficient increases The Gini coefficient decreases Cumulative Households % 4. Explain what each of the following Gini coefficients indicate about the income equality within a country. The Gini coefficient is 0 The Gini coefficient is 1 The Gini coefficient is increasing The Gini coefficient is decreasing