If government collects $250 million in tax revenue and spends $380 million in the economy, calculate the government budget and state what category is the budget under? (Budget Surplus… etc??)
Assume Leslie Collin has a marginal rate of taxation of 27% and her income for 2019 was $77,500/yr calculate her tax liability amount and net income after taxes.
a) government's collection in tax revenue = $250
million
government's total expenditures =$380 million
since the expenditure is greater than income, thus there will be
deficit
Budget deficit = government's total expenditures - government's
total income
= (380-250)million = $130 million
Hence, there is a budget deficit of $130 million
b) Marginal rate of taxation is 27%
income = $77500
tax liability amount = 27% of 77500 = $ 20925
Net income after taxes = (77500-20925) = $56575
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