Regressive using the keynesian consumption function

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You can show that a tax on consumption is regressive using the Keynesian consumption function. Suppose C= 1,000 + .5 Yd, and the government collects 10% of all consumption expenditures in taxes. Calculate the taxes paid by the household earning Yd= 1,000 with the household earning Yd= 10,000. Show that the consumption tax is regressive - show your math.

Reference no: EM13985615

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Regressive using the keynesian consumption function : You can show that a tax on consumption is regressive using the Keynesian consumption function. Suppose C= 1,000 + .5 Yd, and the government collects 10% of all consumption expenditures in taxes. Calculate the taxes paid by the household earning Yd= 1..

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