explanatory variables, personal income (PI) in dollars and the
personal income tax rate (R) in percentage points (e.g. if the tax
rate is 4% then R=4).
Personal income is currently $1,000,000 and the tax rate is 4%.
The Governor proposes reducing the tax rate to 3% and suggests that
the impact of income growth during the next year will offset the
revenue loss from the tax rate reduction. What will personal income
have to be with a 3% tax rate to yield the same revenue that would
result with personal income of $1,000,000 and a 4% tax rate?
- The Equation Below Forecasts Personal Income Tax Pit Using Two Explanatory Variables Personal Income Pi In Dollars 1 (2.4 KiB) Viewed 48 times
B) $3,050,789
C) $4,678,098
D) $1,567,980
E) None of the above.
F) All of the above.
PIT = 300 + 0.08PI + 83945R