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Question: Explain why the wage distribution is positively skewed.  b) Give two reasons for the widening wag...
Question 2 please

Show transcribed image text Explain why the wage distribution is positively skewed. b) Give two reasons for the widening wage gap focusing specifically on why the poor are getting relatively poorer over time. Consider the following (highly) simplified description of the U.S. wage distribution and income and payroll tax schedule. Suppose 50 percent of households care $40,00, 30 percent earn $70,000, 15 percent on income craned from $30,001 to $60,000, 25 percent on income carder from $60,001 to $150,000, and 35 percent on income carder in excess of $150,000. There is also a 7.5 percent payroll tax on all income up to $80,000. a) What are marginal tax rate and average tax rate for each of the four types of households? What are the average household income, payroll, and total tax bill? What percent of the total income tax is paid by each of the four types of households? What percent of the total payroll tax bill is paid by each of the four types of households? b) What is the Gini coefficient for the economy when comparing after-tax incomes across households? c) a presidential candidate wants to remove the cap on payroll taxes so that every household would pay payroll taxes on all of its income. To what level could the payroll tax rate be reduced under the proposal while keeping the total amount of payroll tax collocated the same?

Explain why the wage distribution is positively skewed. b) Give two reasons for the widening wage gap focusing specifically on why the poor are getting relatively poorer over time. Consider the following (highly) simplified description of the U.S. wage distribution and income and payroll tax schedule. Suppose 50 percent of households care $40,00, 30 percent earn $70,000, 15 percent on income craned from $30,001 to $60,000, 25 percent on income carder from $60,001 to $150,000, and 35 percent on income carder in excess of $150,000. There is also a 7.5 percent payroll tax on all income up to $80,000. a) What are marginal tax rate and average tax rate for each of the four types of households? What are the average household income, payroll, and total tax bill? What percent of the total income tax is paid by each of the four types of households? What percent of the total payroll tax bill is paid by each of the four types of households? b) What is the Gini coefficient for the economy when comparing after-tax incomes across households? c) a presidential candidate wants to remove the cap on payroll taxes so that every household would pay payroll taxes on all of its income. To what level could the payroll tax rate be reduced under the proposal while keeping the total amount of payroll tax collocated the same?