Teresa is considering getting a part-time job that pays a monthly income of $1,500. Currently, Teresa is getting monthly cash benefits of $1,000, food stamp benefits of $250, and Medicaid benefits valued at $180. If Teresa accepts the job, all transfer benefits will be lost, and the monthly employment taxes will amount to $800. What is Teresa's marginal tax rate for this job? (Note: Please round your answer to two decimal places.)

Teresa is considering getting a part-time job that pays a monthly income of $1,500. Currently, Teresa is getting monthly cash benefits of $1,000, food stamp benefits of $250, and Medicaid benefits valued at $180. If Teresa accepts the job, all transfer benefits will be lost, and the monthly employment taxes will amount to $800. What is Teresa's marginal tax rate for this job? (Note: Please round your answer to two decimal places.)

Microeconomics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506893

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter15: Income Inequality And Poverty

Section: Chapter Questions

Problem 7CQ

See similar textbooks

Similar questions

Carole works 35 hours a week at a wage rate of $20. Thus, her total weekly income is $700 On this income, she pays total taxes of $49.00 However, she calculates that on the last hour that she works, she pays $4.00 Carole's average tax rate is% (Round your response to two decimal places) Carole's marginal tax rate is% (Round your response to two decimal places) D
Lucille receives an annual salary of $37,500 based on a 37.5-hour workweek. What are her gross earnings for a two-week pay period in which she works 9 hours of overtime at 1 1/2 times her regular rate of pay? (Assume there are exactly 52 weeks in a year. Round your answer to the nearest cent.) Gross earnings =
Laura earns a base salary of $50,000 as an event planner and is subject to the following hypothetical income tax bracket. Laura is considering taking on an additional wedding that will increase her income by $5,000. In order for Laura to deem the wedding worth her time, it must earn her $3,000 after taxes. Please round all answers to two decimal places. Income Tax rate $0-$10,000 5% $10,001-$30,000 10% 20% $30,001-$50,000 $50,001+ 50% What is the marginal tax rate associated with taking on this wedding? 50 What is Laura's average tax rate if the extra wedding is accepted? 0.1636
Jana has the opportunity to buy the boat of her dreams but needs to determine the best way to fund the purchase. The cost of the boat is $22,000, and she’s considering taking on a second job at which she can earn this amount or selling some investments to generate the cash. However, she realizes that she will also have to pay taxes on any amount she receives. If Jana is in the 35 percent marginal tax bracket and earns $22,000 from a second job, by how much will her end-of-year tax liability increase? What if she elects to sell some investments that she’s held for several years at a gain of $22,000? How would your answer change if she had held the investments for just 6 months?
John has gross biweekly earnings of $743.61. By claiming 1 more withholding allowance, John would have $19 more in his take home pay. How many withholding allowances does John currently claim?
Eric earns a base salary of $50,000 as a shipwreck diver and is subject to the following hypothetical income tax bracket. Eric is considering taking on an additional dive that will increase his income by $5,000. In order for Eric to deem the dive worth his time, it must earn him $3,000 after taxes. Please round all answers to two decimal places. Income $0-$10,000 $10,001-$30,000 $30,001-$50,000 $50,001+ Tax rate 5% 10% 20% 50% What is the marginal tax rate associated with taking on this dive? What is Eric's average tax rate if the extra dive is accepted? Given the information, will Eric undertake this extra dive? yes no O need more information How much does Eric end up paying in taxes?
You are looking at three different job options, one in Pennsylvania, one in Texas, and one in New York. The offers are as follows: Salary State tax rate Pennsylvania $62,000 3.07% Texas $64,000 0.00% New York $68,000 6.85% What is the take home pay of the three options? Which of these offers will you accept if you are only interested in maximize your after tax income? Pennsylvania: Texas: New York: Job accepted: Regardless of which job you take, you will have to pay federal income taxes. Assuming you are offered $65,000 use the following tax brackets to determine the federal income tax you owe. Tax Bracket Low end High end 10% $0 $9,225 15% $9,225 $37,450 25% $37,450 $90,750 28% $90,750 $189,300 TAX OWED:
The following table shows income tax rates in Econoland. Annual Income Up to $60,000 From $60,001 to $90,000 Over $90,000 This is an example of a Tax Rate 10% 20% 30% income tax. Nick, a resident of Econoland, currently works 20 hours a week and earns an annual income of $60,000. After paying income taxes, Nick receives per year. If Nick works an additional 10 hours a week (30 hours a week total), his annual income will be $90,000. After paying income taxes, Nick will receive per year. In other words, by working an additional 10 hours per week, Nick will receive an additional If Nick works 10 more hours in a week (40 hours a week total), his annual income will further increase to $120,000. After paying income taxes, Nick will receive per year. In other words, by working 10 more hours per week, Nick will receive more than what he would receive if he works only 30 hours a week. As Nick works more, the additional amount he receives from working 10 more hours " which means his cost of…
In 1972 the maximum earnings of a worker subject to Social Security tax (SST) was $9,000. The maximum earnings subject to SST in 2016 is $118,500. Whatcompound annual increase has been experienced over this 44-year period of time? How does it compare with a 3% annual increase in the consumer price index over the same period of time?
Susan is a single mother with three children. She is a cashier at a food market earning $7.75 per hour and works up to 2,000 hours per year. She is eligible for government benefits, so if she does not earn any income, she will receive a total of $17,050 per year. She can work and still receive government benefits, but for every $1 of income, her government stipend is $1 less. The government has decided to change the benefits policy of every $1 of income earned to reduce the government’s stipend by 60 cents. How will this change Susan's benefits received? What are her new choices? Complete the Revised Poverty Trap Table to present Susan’s options and provide answers to the following: What are the advantages of Susan working? What are the disadvantages of Susan working? What are the advantages of Susan receiving government benefits? What are the disadvantages of Susan receiving government benefits? Based on your findings from the Poverty Trap Table, should Susan continue to work or…
Suppose that the government introduces an EITC such that for the first $8,000 in earnings, the government pays 50¢ per dollar on wages earned. For the next $3,000 of earnings, the credit is held constant at $4,000, and after that point, the credit is reduced at a rate of 20¢ per dollar earned. When the credit reaches zero, there is no additional EITC. Furthermore assume a worker who can work up to 4,000 hours per year at an hourly wage of $10 per hour. 1. The benefit of EITC will disappear at how many hours of leisure? (use just numbers) 2. When the EITC disappears how much does the worker get to consume (do not use $ sign)
You decide to work part-time at a local clothing store. The job pays $8.50 per hour and you work 16 hours per week. Your employer withholds 10% of your gross pay for federal taxes, 5.65% for FICA taxes, and 4% for state taxes. What is your weekly gross pay? How much is withheld per week for federal taxes? How much is withheld per week for FICA taxes?