"We should impose a 20 percent luxury tax on expensive automobiles (those with a sales price of $50,000 or more) in order to collect more tax revenue from the wealthy." Will the burden of the proposed tax fall primarily on the wealthy? Why or why not?

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manhokwe tawandaLv10

30 Sep 2019

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Congress is considering a major tax reform that will impact the revenue side of the budget. Last year President Obama insisted on new tax revenues from the wealthy arguing that old and poor people should not pay the entire burden of the deficit reduction through cuts on social programs, e.g., Medicare, Food Stamps as proposed by republicans. Congress recently passed a Budget Resolution discussing the policy changes they want in the national budget for next year. These proposals call for substantial cutbacks in social programs such as Food Stamps, Housing Support, Medicare, and reducing Medicare and abolishing Obamacare. Explain why you agree or disagree with Congress's best way to work toward a balanced budget. Many conservatives in Congress demand the President agree to their budget cuts and policy changes with the threat of shutting down the US government if he refuses to go along. Remember, the Constitution gives Congress the 'Power of the Pursue' that is to approve all taxes and expenditures.

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14) Suppose the government institutes a $3/unit tax on the sales of some good and the price paid by consumers rises from $9 to $11. With this information we can say (on a per unit basis): A) that consumers bear none of the burden of this tax and producers bear the entire burden. B) that consumers bear the entire burden of this tax and producers bear none of the burden. C) that consumers bear $2 of the burden of this tax and producers bear $l of the burden. D) that consumers bear $2 of the burden of this tax and the government bears $1 of the burden. E) nothing about the burden of the tax without more information.

According to the two âIn the Newsâ articles and the table below,

In the News: Obama Pitches Tax Hike on the Rich

WASHINGTON: President Barack Obama on Wednesday proposed raising taxes on the wealthiest Americans during a major speech Wednesday outlining his long-term plan to bring the federal budget closer to balance.

"At a time when the tax burden on the wealthy is at its lowest level in half a century, the most fortunate among us can afford to pay a little more," Obama told an audience at George Washington University. . . .

Republicans denounced the proposed tax hikes as a sure way to slow economic growth in the United States.

"It's very ironic that a few days before tax day in this country that the president would be coming out asking people to pay more taxes," said Representative Eric Cantor, the Republican majority leader in the House of Representatives.

I don't think many Americans believe that that's the answer to fix this economy and grow jobs.

Analysis: President Obama proposed ending the "tax break for the rich" by increasing the top marginal tax rate from 35 percent to 39.6 percent.

In the News: The Obamas' Taxes
Gross Income		Deductions
Wages	$ 395,188	State/local taxes	$ 52,527
Interest	8,066	Property taxes	25,742
Dividends	9,997	Mortgage interest	49,945
Tax refunds	1,151	Charity	245,075
Book royalties	1,382,889	Total allowed	$ 373,289
Capital loss	(3,000)
Trust income	1,323
Total income	$1,795,614

Adjustments		Exemptions	$ 14,600
Self-employment tax	$ 18,518	Taxable income	$1,340,207
Pension contribution	49,000	Tax	$ 438,949
	$ 67,518
Adjusted Gross Income	$1,728,096

Tax Bracket	Marginal Tax Rate
$0-8,375	10%
$8,375-34,000	15
$34,000-82,400	25
$82,400-171,850	28
$171,850-373,650	33
Over $373,650	35

Had Obama succeeded in raising the top marginal tax rate, how much more tax would he have paid in 2010?

Instructions: Enter your response to two decimal places.

$

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"We should impose a 20 percent luxury tax on expensive automobiles (those with a sales price of $50,000 or more) in order to collect more tax revenue from the wealthy." Will the burden of the proposed tax fall primarily on the wealthy? Why or why not?

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