3. Unemployment benets are subject to income taxes. They are not (by default) subject to withholding, or to payroll taxes. Suppose that a particular worker is subject to a payroll tax of 7.65% of her wages; that she pays an average income tax rate of 10%; and that after losing her job, she is eligible to receive 60% of her previous weekly income. a. What fraction of her takehome paycheck will she receive from unemployment insurance? I). What effect does the tax treatment of unemployment insurance benets have on the ability it provides its recipients for smoothing? During the pandemic, millions of workers lost their jobs. To address the crisis, the federal government expanded the program in several ways: 1) extended eligibility to parttime and self employed workers, 2) extended the duration of benets beyond the standard 26 weeks limit; and 3) added an additional benet of $600 per week for all eligible individuals. c. Discuss the impact of these extensions on incentives for workers. 0!. What does the empirical evidence suggest about the likely behavioral impacts? You should conduct your own research on this question, but here are a couple of references: Holzer, et. al. (NBER WP,2021): htt s: www.nber.or a ers w29575 Finamore 85 Scott (Economic Letters, 2021): htt s: www.sciencedirect.com science article abs ii SO165176520304821?via%3Dihub e. In your judgment, did the U1 extensions succeed