The city of Seattle sells an average of 30,000 hotel rooms per night. Currently, those rooms...

The city of Seattle sells an average of 30,000 hotel rooms per night. Currently, those rooms have an average tax of $90. The city proposed an additional tax of $10 per room to help finance a stadium. Economists believe that without the tax, the city would average an extra 4000 rooms per night due to the new stadium. But with the tax, the number of rooms sold would fall to 27,000 even with the stadium. Based on these numbers, would it be smarter for the city to charge the proposed tax, or to use tax incremental financing to pay for the stadium?

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Rahul Sunny answered 1 year ago

A hotel in Saint Augustine books an average of 50 rooms per night. There is a...

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