Question
Al has an income of $20,000; Betty's income is $40,000. With no sales tax in place, Al spends $5000 on grocery food and Betty spends
Al has an income of $20,000; Betty's income is $40,000. With no sales tax in place, Al spends $5000 on grocery food and Betty spends $8000.
(A) If the state government now taxes all grocery food at 10%, and these two folks do not reduce their food purchases whatsoever, then is this sales tax proportional, progressive, or regressive? SHOW AND LABEL ALL WORK, and interpret the numerical results.
(B) If the above policy is changed such that now Al receives a tax credit of $100 at the end of the year, will your conclusion change? Again, SHOW AND LABEL ALL WORK, and interpret the numerical results.
It's very urgent. I need to get the response during next ONE HOUR (before 4.45pm 4.8.17 in WI, US). Help!
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started