a. Compare a $16,000 tax deduction for costs of health insurance and health care to a $5000 tax credit for those health costs during a given year. How much money do these tax breaks save for a single taxpayer with a marginal income tax rate of 25%? How much for a taxpayer with a marginal income tax rate of 40%? Assume in each case that the taxpayer itemizes deductions and has at least $16,000 in annual costs of health insurance and care.
b. Describe the way that the benefits of health cost tax deductions and tax credits like those in part a are distributed across richer vs. poorer taxpayers. Be as specific as possible, assuming that the taxpayers can deduct what they spend on health insurance and health care, up to a maximum of $18000, or else that they can get a tax credit for what they spend, up to a maximum of $5000.