Explain the purpose of payroll taxes. Is it a proportional form of tax?
What will be an ideal response?
The payroll tax is a tax levied on the earnings from work. It is levied at a fixed percentage of the earning, and shared equally between employees and employers, the proceeds of which are earmarked to be paid into various “trust funds.” These funds, in turn, are used mainly to pay for Social Security, Medicare, and unemployment benefits.On the surface, this tax seems to be proportional, but it is actually highly regressive, for two reasons. First, only wages and salaries are subject to the tax; interest and dividends are not. Second, because Social Security benefits are subject to upper limits, earnings above a certain level are exempted from the Social Security tax. Above this limit, the marginal payroll tax rate is zero.
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The table above gives data for the nation of Mosh. The amount of autonomous expenditure is
A) $1.5 trillion. B) $4 trillion. C) $9.0 trillion. D) $4.5 trillion. E) not shown in this table.
When people are educated, they become:
A. more productive to society, because they have more skills to apply to a job. B. less productive to society, because they stop working while in school. C. less productive to society, because they require higher pay per hour. D. more productive to society, because they are paid more.
Suppose Jonah and Carlos have a contract, which Carlos chooses to breach. Jonah sues, and a court orders Carlos to pay him the amount he expected to gain at the time they made the contract, net of any amount he actually did receive after the breach. The form of payment which the court specifies in this example is called:
a. a contingent fee. b. a specific performance. c. a capitation. d. expectation damages.
Suppose that in an economy the structural unemployment rate is 2.2 percent, the natural unemployment rate is 5.3 percent, and the cyclical unemployment rate is 2 percent. The frictional unemployment rate is _________ percent and the actual unemployment rate (in this economy) is ___________ percent.
a. 7.5; 3.3 b. 4.2; 11.7 c. 7.3; 3.1 d. 3.1; 7.3