Why is it important to consider the personal income tax when evaluating the corporate income tax? Give an example of how differential rates between the corporate and personal income tax rates can change taxpayer behavior
What will be an ideal response?
The corporate income tax cannot be fully understood without considering the personal income tax because the question of whether or not certain income should be taxed at the corporate level may depend on how it is taxed at the personal level. For example, the question of whether dividends should be taxed at the corporate level might depend on how they are taxed at the personal level. If the rates between the corporate and personal income taxes are different, it creates an opportunity for high-income taxpayers to incorporate. When personal income tax rates are higher than corporate income tax rates, the individual has an incentive to realize income through the corporation. When the opposite is true, the individual has an incentive to realize income at the personal level.
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Congressman Gallstone seeks support from his colleagues for a bill he sponsors that will establish a new national park in his district
He offers to support Congresswoman Disrail's proposal to build a new library in her district in exchange for her vote for his national park bill. This is an example of A) government failure. B) regulatory capture. C) rational ignorance. D) logrolling.
Suppose the market demand function for ice cream is Qd = 10 - 2P and the market supply function for ice cream is Qs = 4P - 2, both measured in millions of gallons of ice cream per year. Suppose the government imposes a $0.50 tax on each gallon of ice cream. The consumer surplus with the tax is:
A. $166,667. B. $3.56 million. C. $7.11 million. D. $9 million.
Economics, according to its definition, studies how people:
a. earn and spend money. b. invest in the stock and bond markets. c. make choices in the face of scarcity. d. supply goods in response to demand.
Which of the following would be included in the financial account of the U.S. balance of payments?
a. The U.S. government's foreign aid b. The purchase of a stock in a U.S. corporation by a foreigner c. The purchase of a Japanese computer by a U.S. corporation d. The purchase of a plane ticket from Australian Airlines by a U.S. resident e. The purchase of a German car by a U.S. resident