Exemptions, deductions, and tax credits can lower a taxpayer's taxable income. Discuss their relative merits in terms of helping taxpayers reduce their tax liability
What will be an ideal response?
Assuming a constant dollar amount, the most valuable of the three to a taxpayer would be the tax credit. This is because the tax credit directly reduces a taxpayer's tax liability, while the other two merely reduce the level of taxable income. If a taxpayer itemizes, then deductions and exemptions of a similar amount are of equal value to her. If, however, a taxpayer does not itemize and instead takes the standard deduction, then the exemption would be more valuable than the deduction.
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The reason only newly produced goods and services are counted in GDP is that ________
A) it is very difficult to impute a value to used goods B) most expenditures on used goods and services take place outside the market C) it does not help economists make better economic predictions because second-hand goods rarely have any residual value D) it allows economists to avoid double counting the production of goods and services E) none of the above
Sasha has a master's degree in writing, and currently works full-time as a 2nd grade classroom helper. She submits articles for the local paper on occasion, and gets paid only when the editor agrees to publish a submission. Sasha would love to be a full-time reporter. The best way to describe Sasha is to say she is ________________; the Bureau of Labor Statistics would count Sasha as ____________.
A. underemployed; employed B. employed; employed C. discouraged; underemployed D. underemployed; underemployed