Public Sector Economics Exercises 1. Florida Taxation a. The 5.5% corporate flat tax levied in Florida is a PROPORTIONAL tax because it is based on gross income of corporations. This tax is levied at the identical 5.5% rate across all levels of gross income on corporations registered or doing business in Florida, so by definition, the tax is proportional. b. Florida’s 6% sales tax is REGRESSIVE since all consumers, regardless of earnings are required to pay the same tax rate. There are arguments
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Taxation of Capital Gains & Losses * Calculate gain/loss from sale of each capital asset. * Net gains/losses by holding period – i.e. short-term and long-term * If both “same”, stop do not net again. * If “opposite”, net one final time. * If results are: * Net Short-Term Capital Gain – Taxed as ordinary income * Net Long-Term Capital Gain – Taxed at preferential rates * 28% Rate Gain = Collectibles Gain (Collectibles Gain – Net Short-term
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of a non-inventory asset that was purchased at a lower price. The most common capital gains are realized from the sale of stocks, bonds, precious metals and property. Not all countries implement a capital gains tax and most have different rates of taxation for individuals and corporations. e) Property Tax Many countries have Property tax, or millage tax. It is the tax which the owner pays on the value of the property being
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Q1-1: Think of another company or product besides Apple’s iPad, and note that company’s connections between other functional areas and finance. I chose Starbucks. Starbucks is a $100 billion dollar company. On an article that I read on Starbucks Five year plan to accelerate profit and growth, it had great information on how to successfully run a business and what areas you need to excel in. The company start by wanting to be the employer people want to work for. By investing in their staff the
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and the effective tax rate. 1) Tax settlement and resolution of certain tax positions : Every year Pfizer got a tax benefit resulting from a settlement with the U.S. IRS and various foreign tax authorities. This lowered effective tax rate. 2) Taxation of non-U.S. operations : Jurisdictional location of earning resulted in the reduction of the effective tax rate. Lower tax rates and tax incentives in foreign countries such as Singapore and Puerto Rico reduced effective tax rate. 3) U.S. Healthcare
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Stock vs. Debt When forming a corporation, a transferor-shareholder should take into account some necessary factors to determine whether or not receiving some debt along with stock. 1. Tax Factors [ ① ]. For the shareholder Firstly, to meet the requirement of section 351, the shareholder transferor must receive only stock. Although the gain under section 351 is deferred, if some debts are received along with stock, the debt will be treated as boot and gain will be recognized. Secondly, for debt
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Purchasing a new home is a big decision and should not be entered into lightly and should be given a lot of thought. The marginal benefits and the marginal costs associated with the decision to buy a home can be altered by the state of the economy. Some things can be affected by the actions of the government’s efforts to strengthen economic conditions. An example could be as we talked about in the economic readings; when banks are allowed to lower their reserves, this will make more money available
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Local Sales Tax: Increased or Decreased I. Introduction a. Hook Increasing local sales taxes could benefit the community in numerous amounts of ways. Some people may not like it; however when the bigger picture is looked at it is easy to see that the pros outweigh the cons. b. Necessary background information Many people think that the government gets enough money as it is. They do not consider the fact that the government has to pay bills and employees to keep the city running smoothly and
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Government Intervention -Taxes and Subsidies Indirect Taxes Taxes, which are placed on goods and services, are known as indirect taxes, as opposed to direct taxes which are placed on income and wealth. When a tax such as VAT is levied on a product it has the same economic effects as an increase in the costs of production. In terms of supply and demand, the imposition of a tax may be seen as a fall in supply. Where demand for a good is elastic the government will receive relatively
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CHAPTER 5 CORPORATIONS: REDEMPTIONS AND LIQUIDATIONS SOLUTIONS TO PROBLEM MATERIALS Problems 30. a. Teal Corporation would have a taxable gain of $150,000. The gain would be ordinary or capital depending on the type of property distributed. The E & P of Teal Corporation would be increased by $150,000 (the amount of gain to Teal) and decreased by $250,000 (the FMV of the property distributed). Teal’s E & P also would be decreased by the amount of tax due on the gain recognized. Grace
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