Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Tax fraud is an important economic issue in every country. IRS (The USA Tax System) wants to predict the USA tax income in the next

Tax fraud is an important economic issue in every country. IRS (The USA Tax System) wants to predict the USA tax income in the next ten years based on people's income database in the past years. Clearly, every citizen prefers to pay lower income tax. If IRS wants to study PaidTAXAmount i =f (income i, age i, race i) e where i denotes person i in the income database, which types of model is more appropriate to predict the USA tax income in following years? Multinomial Probit because of violation of lIA property. High income people are similar to each other. Tobit Regression Truncated Linear regression Truncated Linear regression wherein incomei2 must be included to pin down non-linear trend, i.e., high income people want to pay less tax

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Introduction to Global Business Understanding the International Environment & Global Business Functi

Authors: Julian Gaspar, James Kolari, Richard Hise, Leonard Bierman, L. Smith, Antonio Arreola Risa

2nd edition

1305501187, 9780547152127, 547152124, 9781111824259, 1111824258, 978-1305501188

More Books

Students also viewed these Economics questions

Question

What are the big five personality traits? (p. 60)

Answered: 1 week ago

Question

An action plan is prepared.

Answered: 1 week ago