Taxable Income and Tax Rates: Lessons from an Economist

SlickSaxophone avatar
SlickSaxophone
·

Start Quiz

Study Flashcards

10 Questions

What did Martin Feldstein find when America cut its highest tax rate from 50% to 28% in 1986?

Taxable income of the rich adjusted dollar-for-dollar with tax rates.

What does the adjustment in taxable income driven by people altering when and how they take their income suggest?

Raising top tax rates is likely to produce little extra revenue.

What happened to taxable income after tax rates rose in 1993?

It decreased considerably.

What was the main reason for the big fall in taxable income after tax rates rose in 1993?

Rich people adjusted their taxable income.

How does the Laffer Curve relate to the concept discussed in the text?

It demonstrates the relationship between tax rates and government revenue.

What effect did Martin Feldstein's findings have on the belief that raising top tax rates would generate more revenue?

Supported the idea that raising top tax rates would not produce extra revenue

What was the main reason for the big fall in taxable income after tax rates rose in 1993, according to the text?

Rich individuals rushing to cash in stock options before tax increase

How did people respond to the tax rate cut from 50% to 28% in 1986, according to Feldstein's findings?

Adjusted their taxable income downwards to avoid paying high taxes

What conclusion can be drawn about the relationship between tax rates and taxable income based on the text?

Taxable income is affected by both tax rates and individual behavior

How does the concept of Laffer Curve relate to the behavior of taxable income after changes in tax rates?

The Laffer Curve demonstrates the potential impact of tax rate changes on government revenue

Explore how changes in tax rates can impact the taxable income of the rich, based on findings by economist Martin Feldstein. Discover the implications of adjusting tax rates on tax revenues and economic behavior.

Make Your Own Quizzes and Flashcards

Convert your notes into interactive study material.

Get started for free

More Quizzes Like This

Income Tax Principles Quiz
5 questions
Income Tax Knowledge Quiz
5 questions
Income Tax Basics Quiz
5 questions

Income Tax Basics Quiz

SuperLucchesiite avatar
SuperLucchesiite
Exploring Income Tax Essentials
5 questions
Use Quizgecko on...
Browser
Browser