Nt1310 Unit 2

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1) I would advise my friend to take the new job with the higher paying salary. After watching the video for Unit 2 we can learn that, “with marginal tax rates, you only pay the higher tax on the income you earn above the tax bracket threshold.” Marginal tax rates are is not a flat rate, so the percentage that you are taxed is done at levels and once you make a certain amount of money, the tax then increases some for each level. “As income rises, each dollar of income above the previous level is taxed at a higher rate.” Tax rates were designed to be marginal because, “the people who wrote our tax code knew that incentivizing work is important in a functioning economy.” Since our tax rates are marginal I believe taking a promotion will not hurt him because they do not want him to take home less money than he was before. If that was the case nobody would want to accept promotions. Without the incentive to work hard and accept promotions there would not be much economic growth. 2) Regressive tax can be simply defined as having a greater…show more content…
The government tries to maintain our economy by trying to keep it moving at a steady pace without drastic increases or decreases in GDP. The United States government of course wants our economy to increase but they want it to do so in a slow steady pace that will not hurt the economy. The government also tries to maintain a high rate of employment so that that all citizens are working and helping our government. Any money that an employee makes here in the United States helps our economy because then that money is spent here in the United States which helps increase our GDP. It is also important for the government to maintain the stability of price to make sure that we do not have inflation, which could cause our country a huge amount of trouble and cause something like The Great Depression

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