The following table shows the before-tax and after-tax Gini coefficients for Mexico and Canada. Mexico Canada Before tax 0.473 0.427 After tax 0.458 0.303 Discuss the figures in the table in terms of income distribution and compare the taxation policies in the two countries.

The following table shows the before-tax and after-tax Gini coefficients for Mexico and Canada. Mexico Canada Before tax 0.473 0.427 After tax 0.458 0.303 Discuss the figures in the table in terms of income distribution and compare the taxation policies in the two countries.

Microeconomics: Principles & Policy

14th Edition

ISBN:9781337794992

Author:William J. Baumol, Alan S. Blinder, John L. Solow

Publisher:William J. Baumol, Alan S. Blinder, John L. Solow

Chapter17: Taxation And Resource Allocation

Section: Chapter Questions

Problem 4TY

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Question

The following table shows the before-tax and after-tax Gini coefficients for Mexico and Canada.

	Mexico	Canada
Before tax	0.473	0.427
After tax	0.458	0.303

Discuss the figures in the table in terms of income distribution and compare the taxation policies in the two countries.

Rules by which an authority (usually a government) imposes a financial obligation on individuals or organizations within its domain. Property or transactions can be taxed. While taxes are primarily intended to fund the operation of a government, many tax laws are created to encourage or discourage certain behaviors by citizens or companies.

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