Assignment: How much more output (income) per year will have to be produced in the world
(1) Just to provide the 2.7 billion "severely" poor population with $1 more output per day? $ _______
(2) To raise the incomes of the world's "severely poor" population (income less than $2 per day) to the official threshold of U.S. poverty (roughly $5,000 per year per person)? $ ________
(a) Assuming a 10 percent sales tax is levied on all consumption, complete the following table:
Sales Percent of
Income Consumption Tax Income Paid in Taxes
$10,000 $12,000 ______ __________
20,000 18,000 ______ __________
40,000 32,000 _______ __________
80,000 60,000 ________ __________
(b) Is the sales tax progressive or regressive?