A recent opinion poll shows the majority of respondents favor a flat tax of 20 percent on all income, subject to a $35,000 exemption. (The first $35,000 of income would be untaxed.) An independent politician adopts this flat-tax proposal. His opponent is a Democrat who favors increasing the top marginal tax rate to 42 percent. Based on the median voter model, which candidate is likely to win the election.© BrainMass Inc. brainmass.com October 24, 2018, 8:50 pm ad1c9bdddf
According to the median voter model, the opinion held by the median voter will become the decision if the simple majority rule is followed. The median voter by definition is the voter that has the same number of voters on one side as on his other side. For this model to be operational it is necessary that the single peaked condition is satisfied.
In the problem that is given to use a flat tax of 20% above the exemption level of $35,000 is favored by the majority. Using the median voter model this means that the median voter also favors a flat tax of 20 percent on all income, subject to a $35,000 exemption. If we assume that there is a single peaked condition, we can reach the conclusion that the independent politician will win the elections.
The median voter model proposes that if there is majority rule, the opinion of the ...
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A proposal for a negative income tax is designed to provide an income guarantee for each person, irrespective of his/her age or status, of $3,000 per year
A proposal for a negative income tax is designed to provide an income guarantee for each person, irrespective of his/her age or status, of $3,000 per year. Thus, a family of four would have an income guarantee of $12,000 per year. The transfers, under the program, will be phased out at a rate of 25% as earned income increases. Calculate the break-even level of income for a family of four. If all families above the break-even level of income pay a flat rate 25% tax on their earnings, plot disposable income as a function of earned income. Discuss the costs of this plan. Create a graph on a spreadsheet program (such as MS Excel), copy and paste it into a MS Word document, write your answer in the MS Word document, and upload it to Blackboard.View Full Posting Details