Suppose there are two people in a society that has a 50% income tax.Both people have pretax incomes of $40,000.In period 1,there was no tax deduction; Lillian gave $6,000 to charity,and Susie gave $4,000 to charity.In period 2,the government makes charitable donations tax deductible,and Lillian gives $8,000 to charity.What is the amount Susie must give in period 2 so that the marginal impact of the tax break is exactly twice the inframarginal impact of the tax break?
A) $7,000
B) $8,000
C) $10,000
D) $12,000
Correct Answer:
Verified
Q35: Suppose that you owe $4,000 in income
Q36: There is a 20% tax on the
Q37: Which statement about the subsidy for home
Q38: Which statement about the subsidy for home
Q39: By which item can taxpayers reduce the
Q41: Compare and contrast tax deductions and tax
Q42: Explain the concepts of vertical and horizontal
Q43: What is the alternative minimum tax (AMT)?
Q44: According to a 2012 report on tax-paying
Q45: The existence of a marriage tax means
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents