In the United States, there are different tax brackets for different people depending on one’s annual income. For instance, if one makes $0 to $8,500, he must give up 10% of that to the federal government; if one makes $1000 dollars per year, he must pay $100 to the federal government. Within a bracket, there is a set tax rate however, if one makes $379,150+ he must pay 35% of that total to the federal government; if one makes $1,000,000, he must pay $350,000 to the federal government. These numbers don’t mean much until you explore the concept of the ratio. Let us suppose that the income tax rate for all Americans, regardless of the total income, is 20%.
A regressive tax in one in which the percentage decreases as the taxpayers’ income rises. Lower-income earners pay a larger percentage of their income in tax than higher income earners. Therefore such a tax places a larger burden on lower income households than it does on higher income earners. Almost every national government uses regressive taxes to raise a significant portion of its tax revenues. Indirect taxes such as VAT, GST and sales taxes are in fact regressive taxes, placing a larger burden on those whose ability to pay is lower and a smaller burden on the higher –income earners whose ability to pay is greater.
A. $16,500 B. $9,000 C. $25,500 D. $7,500 E. $50,000 Difficulty: Easy 2. Yaro Company owns 30% of the common stock of Dew Co. and uses the equity method to account for the investment. During 2008, Dew reported income of $250,000 and paid dividends of $80,000.
Capital Budgeting Case QBR/501 Capital Budgeting Case Given two separate companies to compare I had to first crunch the numbers using the information on both companies that were proposed. The spending limit was $250,000 and I could not go over that amount. Corporation “A” had revenues equaling $100,000 in year one but increasing by 10% each year. It also had expenses of $20,000 and increasing by 15% each year. The depreciating expense is $5000 each year with a tax rate of 25% and discount rate of 10%.
Imports are greater than exports, and so the net effect of trade is a deficit and its net export it –3% The government spending is 19% because state and local governments can't spend more during a recession. They are usually mandated to balance their budgets, and so must cut spending when tax revenues
Obama, who announced this a couple of weeks ago, is in favor of taxing the rich citizens (making over 250,000 dollars a year as a family) a larger percent than the poor and middle class. You may have heard of the Bush Tax Cuts--this is when George Bush reduced taxes on the rich who were paying a larger percent of their money to the government than the poor and middle class. This also goes into the whole socialism aspect that many people have said Obama takes part in. Republicans are called conservatives, and this usually means that they are more for everyone for themselves. Democrats, or liberals, are usually in favor of taxing the poor less, and of healthcare for people who cannot afford it--this is known as Obamacare, which was repealed because it was considered unconstitutional.
For financial reporting purposes, the two most popular methods of accelerated depreciation are the declining balance method and the sum-of-the-years’ digits method. For tax purposes, the allowable methods of accelerated depreciation depend on the tax law that the taxpayer is subject to. In the United States, the two currently allowable depreciation methods for tax purposes are both accelerated depreciation methods (ACRS and MACRS). As a simple example, a company buys a generator that costs $1,000 that is expected to last for 10 years. Under the most simple form of depreciation, the company might allocate $100 of the cost of the generator to its expenses every year, until the $1000 capital expense has been "used up."
John Bogle, founder of the Vanguard mutual fund family and father of the index fund, and Warren Buffett, likely the most successful investor of the 20th century, both speak out against high turnover in investment portfolios as an activity that serves only to reduce the returns assets can generate. Mr. Buffett places patience high on his list of qualities that make an investor successful. He is noted for saying that he only buys stocks that he would be satisfied holding if he knew that the stock market was going to be closed for the next ten years. Buffett says that ‐ “I often make more money when I am snoozing than when I am
The bonds mature in 10 years. The firm’s average tax rate is 30% and its marginal tax rate is 34%. b. A new common stock issue that paid a $1.75 dividend last year. The par value of the stock is $15, and earnings per share have grown at a rate of 8% per year.
This control of capital by the great powers is why the capital has been increasingly flowing into the pockets of the wealthy members of the international community. The American economy saw a 35 percent increase in productivity between 1973 and 1995, while the gap in income between the 20 percent of the world’s population in the richest and poorest countries grew from 30 to 1 in 1960 to 82 to 1 in 1995 (Herman 2). This shows that the increase productivity does not benefit the global community it is only the great powers exploiting the Third World for their own economic benefit. Supporters of globalization would argue that it provides income and stability for many Third World countries. They most often use the examples of China and India because of their significant economic growth rate after