Austins marginal tax rate is 35 percent and he itemizes his


Question: 1. Austins marginal tax rate is 35 percent, and he itemizes his tax deductions. How much is a $500 deducdon worth to him? How much is a $500 tax credit worth to him?

2. In recent years, legislation has reduced the tax rates on dividends, capital gains, and labor income. Do these changes make sense in terms of the Haig-Simons definition of income? What effects do you think these changes will have on behavior?

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Finance Basics: Austins marginal tax rate is 35 percent and he itemizes his
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