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pentagon [3]
3 years ago
14

When someone owns an asset (such as a share of stock) that rises in value, he has an "accrued" capital gain. If he sells the ass

et, he "realizes" the gains that have previously accrued. Under the U.S. income tax, realized capital gains are taxed, but accrued gains are not.
a. Explain how individuals' behavior is affected by this rule.
b. Some economists believe that cuts in capital gains tax rates, especially temporary ones, can raise tax revenue. How might this be so?
c. Do you think it is a good rule to tax realized but not accrued capital gains? Why or why not?
Business
1 answer:
puteri [66]3 years ago
6 0

Answer:

Please check the answer below

Explanation:

a. One issue is the "locking-in" of assets. If I hold shares of Corporation X, then I can delay paying taxes as long as I don't sell. Effectively, I get to keep all of the interest/dividend payments on my tax liability. However, if I discover that X is really a poor investment and Corporation Y is better, then selling X and buying Y means that I have to pay taxes. This might discourage me from making a switch to a more profitable/efficient investment decision. This is the "locking-in" effect.

b. A short-run cut might cause many people to sell stocks that they had felt "locked-in" with. The penalty for switching is smaller, so more people will do it -- resulting in a great deal of cap gains tax revenue collected.

c. Taxing realized gains, even when the stock is not sold, rather than just accrued gains would eliminate this locking-in effect. Investors would not be penalized for switching to a better investment, and long-term capital gains revenue (as well as efficiency) would rise.

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A common cost that should not be assigned to a particular product on a segmented income statement is:
Ratling [72]

Answer:

The correct answer to the following question is option B) the salary of the corporation president.

Explanation:

In the given question , all the options except option (B) , would be assigned to a particular product , while segmenting on a income statement. A product advertising cost which a company incurred while promoting the product, the direct material cost which a company while in the production of project and a production managers salary would also be included in the product cost. A corporations president who is in the higher level of management in the company, is responsible for making decisions regarding company's vision , strategy development , public relations etc , his or her salary would not be included in product cost.

6 0
3 years ago
Sentinals FC, a soccer club, is hiring new players. The applicants are required to be of a certain height and physical build to
STatiana [176]

Considering the situation described in the question, the phrase that exemplified the situation is "disparate impact."

This is because the disparate impact is a phenomenon or situation that occurs when some policies or decisions are made in a neutral sense.

However, the effect of such policy appears to affect a certain set of people, thereby appearing as if it is discrimination.

In other words, a disparate impact is a form of unintentional discrimination that is originally established as impartial policies or regulations that are made generally but whose effects appear to affect a certain set of people.

In this case, the policy made by Sentinals FC on hiring new players affects a certain set of people.

Hence, in this case, it is concluded that the correct answer is "disparate impact."

Learn more here: brainly.com/question/20510564

8 0
3 years ago
In July 2007 The Wall Street Journal (WSJ) reported that a growing shortage of skilled labor in Eastern European countries such
andrey2020 [161]

Answer:

D) rise in Western European countries and fall in Eastern European countries until the wage rates become more equal.

Explanation:

Two important factors must be considered:

  1. wages in western European nations are still much higher than those in eastern European nations
  2. workers that come from member countries of the European Union may travel freely and work in any country that they can and that belongs to the European Union.

As long as the wages in western European countries continue to be higher and European workers can establish themselves in those counties, the supply of workers will continue to flow from poorer eastern European countries to richer western European countries.

rise in Western European countries and fall in Eastern European countries until the wage rates become more equal.

4 0
3 years ago
How did capitalism fuel industrialization?
Katena32 [7]
<u><em>Capitalists want to make money . . . the best way to do that is to make businesses/production more profitable by increasing production to a large scale (i.e. industrialization)</em></u>
4 0
3 years ago
You need a 35-year, fixed-rate mortgage to buy a new home for $340,000. Your mortgage bank will lend you the money at an APR of
grin007 [14]

Answer: $338712.36

Explanation:

Given the following :

APR = 6.35% = 0.0635

Monthly payment = $1800

Cost of home = $340,000

Period (t) = 420

Monthly rate = 0.0635 / 12

Amount paid on loan = PV of monthly payment :

PMT(1 - (1 / (1 + r)^t)) / r

1800[(1 - (1 / (1 + 0.0635/12)^420)) / r]

1800[ (1 - (1 /9.1764488)) / r

1800[ 1 - 0.1089746] / (0.0635 / 12)

1800 [168.38275]

= $303088.95

Hence, amount yet to pay :

$340,000 - $303088.95 = $36911.05

Hence, balloon payment :

36911.05( 1 + r)^t

36911.05(1 + 0.0635/12)^420

36911.05(1 + 0.0052916)^420

36911.05(1.0052916)^420

36911.05 × 9.1764488

= $338712.36

8 0
3 years ago
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