Taxation Policy and Structure
ECON 353 – OP01
Spring 2021 Assignment #1 Due: Monday, May 17, 2021
There are 5 questions in the assignment with a total of 30 marks available. The assignment must be submitted by 11:59pm MDT on the due date to avoid a penalty. Submit by email with the subject “Assignment 1 <Student Name, Student ID>”.
- Refer to table 1 from the textbook (below). Based on this data, can we make any conclusions about changes in the size of government between 1991 and 2014? Has the size of government grown, contracted or remained the same over that period? [6 marks]
Sources: Statistics Canada. CANSIM data from the following series v52531007, v62471023, v466668, v62471340 series.
- Higher payroll taxes may be required to finance the Canada Pension Plan as the population If employers are asked to pay all of any such increase, rather than sharing the increase equally between employers and employees, how would this affect wages and employment? Would businesses likely end up paying for the increase in CPP premiums? [3 marks]
- A monopolist produces commodity Suppose that an ad valorem tax is levied on Z. What are the effects of the tax on the quantity demanded, the price paid by consumers, the price paid by the monopolist, and monopoly profits? Who bears the tax burden? State your assumptions and use a graph to illustrate your conclusions. [5 marks]
- Suppose that provincial income tax is computed as a flat rate of 10 percent, however no tax is levied above $70,000 in taxable Taxable income, in turn, is computed as the individual’s income minus $18,000; that is, everyone receives a $18,000 deduction. What are the marginal and average tax rates for each of the following workers? (Evaluate the marginal tax rate at each person’s current income level.) [6 marks]
- A part-time worker in the fast-food industry with annual income of $12,000.
- A office manager with annual income of $72,000.
- A Chief Financial Officer of with annual income of $200,000.
Is the tax progressive, proportional, or regressive with respect to income?
- Which of the following is likely to impose a large excess burden (deadweight loss)? Why or why not? Use graphs to illustrate your (Be sure to clearly state your assumptions.)
- A tax on
- A tax on
- A tax on orange
- A subsidy on theatre
- A tax on