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Business, 06.12.2019 21:31 oaaliyah505

Suppose montana establishes an income tax schedule that has a tax rate of 5% on the first $20,000 of taxable income, 10% on the next $10,000 of taxable income, and then 20% on all taxable income above $30,000. montana also provides a $2,000 exemption per family member. (a) the abrams family has three members: thomas (the sole earner), and his two kids. the fam-ily's annual income is $35,000. calculate their: (i) taxable income; (ii) marginal tax rate (mtr)) total taxes paid; (iv) average tax rate (atr). (b) the brigham family has four members: rachel (the sole earner), and her three daughters. the family's annual income is $100,000. for the brigham family, calculate the same four items as you did for the abrams family in (a). (c) suppose that under montana's tax system, taxes are levied at the household level (i. e. the marginal tax rates apply to combined spousal income). does this tax system provide thomas and rachel a financial incentive to marry each other, or does it provide a disincentive? (d) suppose that montana decides to move to a flat tax rate of 15%, keeping the $2,000 per family member exemption. (let's call this tax system b.) do these two families benefit or suffer from the transition to this new system? (e) is there a marriage incentive or disincentive under system b?

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Suppose montana establishes an income tax schedule that has a tax rate of 5% on the first $20,000 of...
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