What is the overall effect of increasing tax and increasing government expenditure by the same proportion?
This has an interesting implication. If an increase in govt. spending is matched by an equal increase in taxes, so that the budget remains balanced, output and national income will rise by the amount of the increase in govt spending. Although it might look impractical for the economy to grow without having deficit budget but it can be proved using simple Keynesian analysis:We all know that people spend a part of their income on consumption, a part is used to pay taxes and save the rest i.e. Total income, Y = C+S+T. Taxes imposed by govt. take a part of the income away from the household and disposable income becomes, Y* = C + S or Y - T.Let us define a variable ‘c’ = marginal propensity to consume, it is the fraction of total additional income that people use for consumption.Now, if total income of economy increases from 0 to Y, total consumption of the economy should be C = C*+ c.Y*, where C*>0 is the minimum consumption level of economy and is a given item, therefore constant.Similarly, suppose planned investment demand of firms = I, also a given item.Planned Govt. expenditure = GTaxes imposed by govt. = TThus aggregate demand for final goods in economy, AD = demand due to planned consumption + planned investment demand + demand on account of govt. expenditure.i.e. AD = C*+ c.Y* + I + G = C*+ I + G + c (Y - T)When the final goods market reaches equilibrium, aggregate demand = output of goods and services in economy = National income/ GDP.i.e. Y = C*+ I + G + c (Y - T)ΔY = ΔG + c ( ΔY - ΔT) since planned investment and minimum consumption level does not change (ΔC* = ΔI = 0)Now coming to your question when ΔG = ΔT, we haveΔY / ΔG = (1-c) / (1-c) = 1This means national income increases by the same amount by which govt. spending increases, and the balanced budget multiplier is unity. For instance if G increases in a fiscal year by 500 the equilibrium income would also increase by 500 in this case.P.S. : It is assumed that the govt. does not impose indirect taxes and subsidies.
How can I file two different tax returns for two jobs?
I worked 2 jobs last year, meaning I will have 2 separate W2's to file for my tax return. I already know that when you file 2 different W2's, the IRS/Turbo Tax will read it as earning 'double' and it will decrease my refund. For example, when I enter just 1 of my W2's, my initial tax refund is well over $1,000. However, when I add my second W2, my refund decreases to only $600. Is there any way that I can avoid this from happening? Must I file both? I make very little during the year, and I don't like that I am being 'punished' with my tax return for having to work two different jobs.
How can we change the tax code to ease the burden on our families and promote growth and innovation?
Make it easier to understand and comply. It shouldn't take a college degree in accountancy and tax law to do one's own taxes. We are a simple family with no rental income, few investments, etc., and yet it is an incredible mental burden to do our own taxes. The legal language and myriad of deductions, exemptions, and exceptions are, frankly, ridiculous. Without so many rules and regulations, taxes would be easier and people couldn't cheat so much, either. And the IRS and state revenue departments wouldn't have to spend so much manpower catching cheaters.
If Ram's salary was decreased by 50% and subsequently increased by 50%, how much percent did he lose?
if x and y be the % change in the salary (- for decrease and + for increse ),then the general formula for this type of questions isresultant change = x + y + (x*y /100) substitute x and y with appropriate sign .in case of your question x = -50% y= 50%so resultant change = -50 +50 +((-50)*50)/100 = -25%and hence the answer
Why does my federal tax refund decrease a lot when I enter my 2nd w2?
Here's an example.Say you made a total of $45,000 at your two jobs - $15,000 at the first and $30,000 at the second - and you had $1975 withheld at the first one and $3950 withheld at the second one (i.e. twice as much). You are single with no other dependents, taking a standard deduction and a personal exemption.When you enter in the first W-2, the system computes taxable income of $5500 ($15,000 - $5800 standard deduction - $3700 personal exemption) and tax due of $553. Your refund is $1422 ($1975 - $553).When you enter in the second W-2, the system computes taxable income of $35,500 ($45,000 - $5800 standard deduction - $3700 personal exemption) and tax due of $5006. Your refund is now $919 ($1975 + $3950 - $5006).What changed is where the system - Turbo Tax in this example - thinks you are in the IRS tax brackets. In the first example TT thinks that with your total income you are in the 10% bracket; once you add in the second W-2 you move up to the 15% bracket, and TT correctly increases the tax proportionately, so you owe relatively more and get relatively less back.Employers have a table that they use to determine how much to withhold - it's in IRS Publication 15, if you are interested, http://www.irs.gov/publications/... - based on pay period, your gross salary during that period, and the info you fill out on your W-4.
Why does my federal tax refund decrease a lot when I enter my 2nd w2?
I am using turbotax to do my tax this year. Last year I switched to a new job in April. But I never held 2 jobs at the same time. Since I have 2 employers I have 2 w2s this year. When I only entered my first w2, I had a nice federal refund, but once I entered the 2nd w2, my federal refund turns into negative up to $1000. The annual salary difference between the 2 jobs is like 10k, and I am still in the same tax bracket. Can anyone explain to me why this is happening?
How much income tax do you pay in the U.S.A.?
Both Federal and State income tax rates are based on married status and the level of Adjusted Gross Income (gross income less exemptions and above the line deductions).Federal Individual Income Tax Rates by Tax Year2016 State Income Tax Rates
Can you rent an apartment in two different states?
Yes, it's legal to rent in two different states. However, you need to make sure that you have sufficient income to pay for both of the apartments. I was in a lease once; I gave notice and moved to another state. When I went to rent an apartment in the new state, I was told that I was still on my old lease (even though they had said I wasn't!) and the new place would not rent to me until I was off my old lease. I assume that if I had had enough income to rent both it wouldn't have been a problem. If you are only living in the new state temporarily, you can probably get away with not changing your license or license plate. Really you are supposed to within 30 days of moving there, but unless you get pulled over no one will probably ever think otherwise. My husband lived in another state for two years (while going to school) and never had his changed; I lived in the same state for a year and never had mine changed either. You will have to pay taxes for whatever state you are working in. Say you live in Texas (no state income tax) but are working in Michigan (where there is a state income tax), you will still have to pay state income tax to Michigan when you file your taxes. You would simply file as a non-resident of Michigan. Any income that you may have made in Texas you would NOT pay state income tax on. When you file your taxes, if you use TaxAct.com (free federal efile, you pay for state), it will walk you through filing in more than one state if necessary. Other programs may do this as well but that's the one I use.