lectures in macroeconomics- charles w. upton wealth and taxes- calculations
Post on 20-Dec-2015
220 views
TRANSCRIPT
![Page 1: Lectures in Macroeconomics- Charles W. Upton Wealth and Taxes- Calculations](https://reader031.vdocument.in/reader031/viewer/2022032309/56649d415503460f94a1b6e4/html5/thumbnails/1.jpg)
Lectures in Macroeconomics- Charles W. Upton
Wealth and Taxes- Calculations (1) (2) (3) (1) Initial Assets 0 120,600 76,500 (2) Interest Income 0 30,150 19,125 (3) Financial Net Worth 0 150,750 95,625
(4) Wage Income 0 225,000 472,500 (5) PV of Wage Income 482,400 603,000 472,500 (6) Wealth 482,400 452,250 376,875 (7) Consumption 120,600 150,750 188,438
(8) Net Income 0 194,850 453,375 (9) Saving 120,600 44,100 264,938 (10) Assets, End of Period 120,600 76,500 188,438
![Page 2: Lectures in Macroeconomics- Charles W. Upton Wealth and Taxes- Calculations](https://reader031.vdocument.in/reader031/viewer/2022032309/56649d415503460f94a1b6e4/html5/thumbnails/2.jpg)
Wealth and Taxes-Calculations
Some Assumptions
Period Wage Rate
1 0
2 300,000
3 630,000
4 0
r= 50%
![Page 3: Lectures in Macroeconomics- Charles W. Upton Wealth and Taxes- Calculations](https://reader031.vdocument.in/reader031/viewer/2022032309/56649d415503460f94a1b6e4/html5/thumbnails/3.jpg)
Wealth and Taxes-Calculations
Some Assumptions
Period Wage Rate
1 0
2 300,000
3 630,000
4 0
r= 50%w = 0.25
r = 0.50
![Page 4: Lectures in Macroeconomics- Charles W. Upton Wealth and Taxes- Calculations](https://reader031.vdocument.in/reader031/viewer/2022032309/56649d415503460f94a1b6e4/html5/thumbnails/4.jpg)
Wealth and Taxes-Calculations
Some Assumptions
Period Wage Rate
1 0
2 300,000225,000
3 630,000472,500
4 0
r= 50%w = 0.25
r = 0.50
![Page 5: Lectures in Macroeconomics- Charles W. Upton Wealth and Taxes- Calculations](https://reader031.vdocument.in/reader031/viewer/2022032309/56649d415503460f94a1b6e4/html5/thumbnails/5.jpg)
Wealth and Taxes-Calculations
Some Assumptions
Period Wage Rate
1 0
2 300,000225,000
3 630,000472,500
4 0
r= 50%
25.0)1( rr rtaxafter
w = 0.25
r = 0.50
![Page 6: Lectures in Macroeconomics- Charles W. Upton Wealth and Taxes- Calculations](https://reader031.vdocument.in/reader031/viewer/2022032309/56649d415503460f94a1b6e4/html5/thumbnails/6.jpg)
Wealth and Taxes-Calculations
Period One Calculations (1) (1) Initial Assets 0 (2) Interest Income 0 (3) Financial Net Worth 0
(4) Wage Income 0 (5) PV of Wage Income 482,400 (6) Wealth 482,400 (7) Consumption 120,600
(8) Net Income 0 (9) Saving 120,600 (10) Assets, End of Period 120,600
![Page 7: Lectures in Macroeconomics- Charles W. Upton Wealth and Taxes- Calculations](https://reader031.vdocument.in/reader031/viewer/2022032309/56649d415503460f94a1b6e4/html5/thumbnails/7.jpg)
Wealth and Taxes-Calculations
Period One Calculations (1) (1) Initial Assets 0 (2) Interest Income 0 (3) Financial Net Worth 0
(4) Wage Income 0 (5) PV of Wage Income 482,400 (6) Wealth 482,400 (7) Consumption 120,600
(8) Net Income 0 (9) Saving 120,600 (10) Assets, End of Period 120,600
500,472)25.01(
1000,225
25.01
12
z
![Page 8: Lectures in Macroeconomics- Charles W. Upton Wealth and Taxes- Calculations](https://reader031.vdocument.in/reader031/viewer/2022032309/56649d415503460f94a1b6e4/html5/thumbnails/8.jpg)
Wealth and Taxes-Calculations
Period One Calculations (1) (1) Initial Assets 0 (2) Interest Income 0 (3) Financial Net Worth 0
(4) Wage Income 0 (5) PV of Wage Income 482,400 (6) Wealth 482,400 (7) Consumption 120,600
(8) Net Income 0 (9) Saving 120,600 (10) Assets, End of Period 120,600
zc4
1
![Page 9: Lectures in Macroeconomics- Charles W. Upton Wealth and Taxes- Calculations](https://reader031.vdocument.in/reader031/viewer/2022032309/56649d415503460f94a1b6e4/html5/thumbnails/9.jpg)
Wealth and Taxes-Calculations
Period One Calculations (1) (1) Initial Assets 0 (2) Interest Income 0 (3) Financial Net Worth 0
(4) Wage Income 0 (5) PV of Wage Income 482,400 (6) Wealth 482,400 (7) Consumption 120,600
(8) Net Income 0 (9) Saving 120,600 (10) Assets, End of Period 120,600
![Page 10: Lectures in Macroeconomics- Charles W. Upton Wealth and Taxes- Calculations](https://reader031.vdocument.in/reader031/viewer/2022032309/56649d415503460f94a1b6e4/html5/thumbnails/10.jpg)
Wealth and Taxes-Calculations
Period One Calculations (1) (1) Initial Assets 0 (2) Interest Income 0 (3) Financial Net Worth 0
(4) Wage Income 0 (5) PV of Wage Income 482,400 (6) Wealth 482,400 (7) Consumption 120,600
(8) Net Income 0 (9) Saving 120,600 (10) Assets, End of Period 120,600
![Page 11: Lectures in Macroeconomics- Charles W. Upton Wealth and Taxes- Calculations](https://reader031.vdocument.in/reader031/viewer/2022032309/56649d415503460f94a1b6e4/html5/thumbnails/11.jpg)
Wealth and Taxes-Calculations
Period Two Calculations (1) (2) (1) Initial Assets 0 120,600 (2) Interest Income 0 30,150 (3) Financial Net Worth 0 150,750
(4) Wage Income 0 225,000 (5) PV of Wage Income 482,400 603,000 (6) Wealth 482,400 452,250 (7) Consumption 120,600 150,750
(8) Net Income 0 194,850 (9) Saving 120,600 44,100 (10) Assets, End of Period 120,600 76,500
![Page 12: Lectures in Macroeconomics- Charles W. Upton Wealth and Taxes- Calculations](https://reader031.vdocument.in/reader031/viewer/2022032309/56649d415503460f94a1b6e4/html5/thumbnails/12.jpg)
Wealth and Taxes-Calculations
Period Two Calculations
(1) (2) (1) Initial Assets 0 120,600 (2) Interest Income 0 30,150 (3) Financial Net Worth 0 150,750
(4) Wage Income 0 225,000 (5) PV of Wage Income 482,400 603,000 (6) Wealth 482,400 452,250 (7) Consumption 120,600 150,750
(8) Net Income 0 194,850 (9) Saving 120,600 44,100 (10) Assets, End of Period 120,600 76,500
![Page 13: Lectures in Macroeconomics- Charles W. Upton Wealth and Taxes- Calculations](https://reader031.vdocument.in/reader031/viewer/2022032309/56649d415503460f94a1b6e4/html5/thumbnails/13.jpg)
Wealth and Taxes-Calculations
Period Two Calculations (1) (2) (1) Initial Assets 0 120,600 (2) Interest Income 0 30,150 (3) Financial Net Worth 0 150,750
(4) Wage Income 0 225,000 (5) PV of Wage Income 482,400 603,000 (6) Wealth 482,400 452,250 (7) Consumption 120,600 150,750
(8) Net Income 0 194,850 (9) Saving 120,600 44,100 (10) Assets, End of Period 120,600 76,500
500,47225.1
1000,225
![Page 14: Lectures in Macroeconomics- Charles W. Upton Wealth and Taxes- Calculations](https://reader031.vdocument.in/reader031/viewer/2022032309/56649d415503460f94a1b6e4/html5/thumbnails/14.jpg)
Wealth and Taxes-Calculations
Period Two Calculations (1) (2) (1) Initial Assets 0 120,600 (2) Interest Income 0 30,150 (3) Financial Net Worth 0 150,750
(4) Wage Income 0 225,000 (5) PV of Wage Income 482,400 603,000 (6) Wealth 482,400 452,250 (7) Consumption 120,600 150,750
(8) Net Income 0 194,850 (9) Saving 120,600 44,100 (10) Assets, End of Period 120,600 76,500
zc3
1
![Page 15: Lectures in Macroeconomics- Charles W. Upton Wealth and Taxes- Calculations](https://reader031.vdocument.in/reader031/viewer/2022032309/56649d415503460f94a1b6e4/html5/thumbnails/15.jpg)
Wealth and Taxes-Calculations
Period Two Calculations
(1) (2) (1) Initial Assets 0 120,600 (2) Interest Income 0 30,150 (3) Financial Net Worth 0 150,750
(4) Wage Income 0 225,000 (5) PV of Wage Income 482,400 603,000 (6) Wealth 482,400 452,250 (7) Consumption 120,600 150,750
(8) Net Income 0 194,850 (9) Saving 120,600 44,100 (10) Assets, End of Period 120,600 76,500
![Page 16: Lectures in Macroeconomics- Charles W. Upton Wealth and Taxes- Calculations](https://reader031.vdocument.in/reader031/viewer/2022032309/56649d415503460f94a1b6e4/html5/thumbnails/16.jpg)
Wealth and Taxes-Calculations
Period Two Calculations (1) (2) (1) Initial Assets 0 120,600 (2) Interest Income 0 30,150 (3) Financial Net Worth 0 150,750
(4) Wage Income 0 225,000 (5) PV of Wage Income 482,400 603,000 (6) Wealth 482,400 452,250 (7) Consumption 120,600 150,750
(8) Net Income 0 194,850 (9) Saving 120,600 44,100 (10) Assets, End of Period 120,600 76,500
![Page 17: Lectures in Macroeconomics- Charles W. Upton Wealth and Taxes- Calculations](https://reader031.vdocument.in/reader031/viewer/2022032309/56649d415503460f94a1b6e4/html5/thumbnails/17.jpg)
Wealth and Taxes-Calculations
Period Three Calculations
(1) (2) (3) (1) Initial Assets 0 120,600 76,500 (2) Interest Income 0 30,150 19,125 (3) Financial Net Worth 0 150,750 95,625
(4) Wage Income 0 225,000 472,500 (5) PV of Wage Income 482,400 603,000 472,500 (6) Wealth 482,400 452,250 376,875 (7) Consumption 120,600 150,750 188,438
(8) Net Income 0 194,850 453,375 (9) Saving 120,600 44,100 264,938 (10) Assets, End of Period 120,600 76,500 188,438
![Page 18: Lectures in Macroeconomics- Charles W. Upton Wealth and Taxes- Calculations](https://reader031.vdocument.in/reader031/viewer/2022032309/56649d415503460f94a1b6e4/html5/thumbnails/18.jpg)
Wealth and Taxes-Calculations
Period Three Calculations
(1) (2) (3) (1) Initial Assets 0 120,600 76,500 (2) Interest Income 0 30,150 19,125 (3) Financial Net Worth 0 150,750 95,625
(4) Wage Income 0 225,000 472,500 (5) PV of Wage Income 482,400 603,000 472,500 (6) Wealth 482,400 452,250 376,875 (7) Consumption 120,600 150,750 188,438
(8) Net Income 0 194,850 453,375 (9) Saving 120,600 44,100 264,938 (10) Assets, End of Period 120,600 76,500 188,438
![Page 19: Lectures in Macroeconomics- Charles W. Upton Wealth and Taxes- Calculations](https://reader031.vdocument.in/reader031/viewer/2022032309/56649d415503460f94a1b6e4/html5/thumbnails/19.jpg)
Wealth and Taxes-Calculations
Period Three Calculations (1) (2) (3) (1) Initial Assets 0 120,600 76,500 (2) Interest Income 0 30,150 19,125 (3) Financial Net Worth 0 150,750 95,625
(4) Wage Income 0 225,000 472,500 (5) PV of Wage Income 482,400 603,000 472,500 (6) Wealth 482,400 452,250 376,875 (7) Consumption 120,600 150,750 188,438
(8) Net Income 0 194,850 453,375 (9) Saving 120,600 44,100 264,938 (10) Assets, End of Period 120,600 76,500 188,438
33 2
1zc
![Page 20: Lectures in Macroeconomics- Charles W. Upton Wealth and Taxes- Calculations](https://reader031.vdocument.in/reader031/viewer/2022032309/56649d415503460f94a1b6e4/html5/thumbnails/20.jpg)
Wealth and Taxes-Calculations
Period Three Calculations (1) (2) (3) (1) Initial Assets 0 120,600 76,500 (2) Interest Income 0 30,150 19,125 (3) Financial Net Worth 0 150,750 95,625
(4) Wage Income 0 225,000 472,500 (5) PV of Wage Income 482,400 603,000 472,500 (6) Wealth 482,400 452,250 376,875 (7) Consumption 120,600 150,750 188,438
(8) Net Income 0 194,850 453,375 (9) Saving 120,600 44,100 264,938 (10) Assets, End of Period 120,600 76,500 188,438
![Page 21: Lectures in Macroeconomics- Charles W. Upton Wealth and Taxes- Calculations](https://reader031.vdocument.in/reader031/viewer/2022032309/56649d415503460f94a1b6e4/html5/thumbnails/21.jpg)
Wealth and Taxes-Calculations
Period Four Calculations (1) (2) (3) (4) (1) Initial Assets 0 120,600 76,500 188,438 (2) Interest Income 0 30,150 19,125 47,108 (3) Financial Net Worth 0 150,750 95,625 235,547
(4) Wage Income 0 225,000 472,500 0 (5) PV of Wage Income 482,400 603,000 472,500 0 (6) Wealth 482,400 452,250 376,875 188,438 (7) Consumption 120,600 150,750 188,438 235,547
(8) Net Income 0 194,850 453,375 47,109 (9) Saving 120,600 44,100 264,938 188,438 (10) Assets, End of Period 120,600 76,500 188,438 0
![Page 22: Lectures in Macroeconomics- Charles W. Upton Wealth and Taxes- Calculations](https://reader031.vdocument.in/reader031/viewer/2022032309/56649d415503460f94a1b6e4/html5/thumbnails/22.jpg)
Wealth and Taxes-Calculations
Period Four Calculations (1) (2) (3) (4) (1) Initial Assets 0 120,600 76,500 188,438 (2) Interest Income 0 30,150 19,125 47,108 (3) Financial Net Worth 0 150,750 95,625 235,547
(4) Wage Income 0 225,000 472,500 0 (5) PV of Wage Income 482,400 603,000 472,500 0 (6) Wealth 482,400 452,250 376,875 188,438 (7) Consumption 120,600 150,750 188,438 235,547
(8) Net Income 0 194,850 453,375 47,109 (9) Saving 120,600 44,100 264,938 188,438 (10) Assets, End of Period 120,600 76,500 188,438 0
![Page 23: Lectures in Macroeconomics- Charles W. Upton Wealth and Taxes- Calculations](https://reader031.vdocument.in/reader031/viewer/2022032309/56649d415503460f94a1b6e4/html5/thumbnails/23.jpg)
Wealth and Taxes-Calculations
Period Four Calculations (1) (2) (3) (4) (1) Initial Assets 0 120,600 76,500 188,438 (2) Interest Income 0 30,150 19,125 47,108 (3) Financial Net Worth 0 150,750 95,625 235,547
(4) Wage Income 0 225,000 472,500 0 (5) PV of Wage Income 482,400 603,000 472,500 0 (6) Wealth 482,400 452,250 376,875 235,547 (7) Consumption 120,600 194,850 188,438 235,547
(8) Net Income 0 194,850 453,375 47,109 (9) Saving 120,600 44,100 264,938 188,438 (10) Assets, End of Period
120,600 76,500 188,438 0
![Page 24: Lectures in Macroeconomics- Charles W. Upton Wealth and Taxes- Calculations](https://reader031.vdocument.in/reader031/viewer/2022032309/56649d415503460f94a1b6e4/html5/thumbnails/24.jpg)
Wealth and Taxes-Calculations
The Moral
• The Basic Consumption Model Still Applies
• We now use after-tax cash flows and after-tax interest rates.
![Page 25: Lectures in Macroeconomics- Charles W. Upton Wealth and Taxes- Calculations](https://reader031.vdocument.in/reader031/viewer/2022032309/56649d415503460f94a1b6e4/html5/thumbnails/25.jpg)
Wealth and Taxes-Calculations
The Moral
• The Basic Consumption Model Still Applies
• We now use after-tax cash flows and after-tax interest rates.
• This gives us a powerful procedure for analyzing tax proposals and transfer payments.
![Page 26: Lectures in Macroeconomics- Charles W. Upton Wealth and Taxes- Calculations](https://reader031.vdocument.in/reader031/viewer/2022032309/56649d415503460f94a1b6e4/html5/thumbnails/26.jpg)
Wealth and Taxes-Calculations
End
©2003 Charles W. Upton. All rights reserved