3. For each of the taxes below, indicate whether you think the tax burden will be...

3. For each of the taxes below, indicate whether you think the tax burden will be borne primarily by consumers or producers. Also, how successful do you think each tax will be in raising revenues?

a) A city tax on the use of paper bags in supermarkets. Consumers have the option of asking for plastic bags or bringing their own bags.

b) An increase in the national gasoline tax.

c) A tax on paper copies of textbooks when online versions of the books are available. Discuss why students’ preferences (i.e., whether they are willing to use online texts) are important in determining the effect of the tax.

Solutions

Expert Solution

A. A city tax on the use of paper bags will induce consumers to bring their own bags when they shop from supermarkets. This is because for a middle income consumer, this tax on paper bags will have an impact on their budget. They would therefore prefer to carry bags at all times so that they won't have to pay extra for the bags. The burden primarily falls on the consumer. The extent to which revenue can be successfully raised by the government is less. This is why it will not be very successful in raising revenue.

B. An increase in the gasoline tax will make it expensive. The tax adds on to the price of gasoline and leads to an increase in the price. This will reduce the consumption of gasoline. People would switch to public transport. The burden is beared by the consumers and will reduce their consumption of gasoline. But to the extent that it is not possible to completely avoid gasoline consumption, it will increase the revenue for the government.

C. A tax on paper copies of textbooks will increase the revenue of the government. The tax burden of the products can be passed on to the consumers. This is because some students would have strong preference for textbooks. This is why they would continue buying textbooks even if a tax was imposed, which would lead to an increase in the revenue of the government.

Rahul Sunny answered 1 year ago

Next > < Previous

Related Solutions

Indicate whether each of the following statements (a-e) is TRUE or FALSE. If you think a statement...

Indicate whether each of the following statements (a-e) is TRUE or FALSE. If you think a statement is FALSE, explain why. (10 pts) a. TRUE / FALSE Graft rejection is mediated by pre-existing host T cell effectors and antibodies specific for antigens on the grafted tissue. b. TRUE / FALSE Allogeneic grafts between individuals with identical HLA genes will be accepted. c. TRUE / FALSE Your parents are generally going to be your best source of tissues if you need a transplant. d. TRUE / FALSE Graft rejection only...

For each of the questions below, a histogram is described. Indicate in each case whether, in...

For each of the questions below, a histogram is described. Indicate in each case whether, in view of the Central Limit Theorem, you can be confident that the histogram would look like approximately a bell-shaped (normal) curve, and give a brief explanation why (one sentence is probably sufficient). There are no data for these questions, so you will not need to use the computer to answer these questions. A police department records the number of 911 calls made each day...

For each of the questions below, a histogram is described. Indicate in each case whether, in...

For each of the questions below, a histogram is described. Indicate in each case whether, in view of the Central Limit Theorem, you can be confident that the histogram would look like approximately a bell-shaped (normal) curve, and give a brief explanation why (one sentence is probably sufficient). 1. The price of one gallon of gasoline at a particular gas station is recorded every day of the year, and the 365 values are plotted in a histogram. 2. Two hundred...

For each event below indicate the outcome in the loanable funds market. Indicate whether the supply...

For each event below indicate the outcome in the loanable funds market. Indicate whether the supply or demand of loanable funds shifts and in what direction. Specify what happens to the real interest rate, the quantity of national saving and the quantity of investment. Unless specified, assume the government has a balanced budget. a. The amount Canadians can contribute to their Registered Retirement Savings Plan (RRSP) is increased. b. The federal government experiences a budget deficit as it borrows billions for...

For each item listed below, indicate whether you feel it relates to financial or managerial accounting....

For each item listed below, indicate whether you feel it relates to financial or managerial accounting. Explain your reasoning behind your answer for each item. a. Projected net income for next quarter by division b. Defective goods produced as a percentage of all goods produced c. Income statement for the most current year, prepared in accordance with U.S. GAAP. d. Monthly sales broken down by geographic region e. Production department budget for the next quarter. f. Balance sheet at the...

For each of the following payroll-related taxes, indicate whether they apply to employees only, employers only,...

For each of the following payroll-related taxes, indicate whether they apply to employees only, employers only, or both. Look up the current rates for each category. · Federal Income Tax · Medicare Tax · Social Security Tax · Federal Unemployment Compensation Tax · State Unemployment Compensation Tax Answer these questions with a minimum posting of 250 words that is complete, thoughtful, and written in Standard English.

For each item listed below, indicate whether it involves a: a. permanent difference.

For each item listed below, indicate whether it involves a:a. permanent difference.b. temporary difference that will result in future deductible amounts (giving rise to deferred tax assets).c. temporary difference that will result in future taxable amounts (giving rise to deferred tax liabilities).____ 1. Rent is collected in advance from a tenant. Rent is taxable when received.____ 2. Warranty costs are accrued at the time of sale for accounting purposes, but are not deductible until paid for income tax purposes.____ 3....

3. For each of the following policies indicate whether the policy is: 1. A monetary or...

3. For each of the following policies indicate whether the policy is: 1. A monetary or a fiscal policy. 2. An active or a passive policy. 3. A policy by rules or with discretion. (4 total points, 1 point each) A. The central bank follows a policy of allowing the money supply to grow at a constant 4% per year. B. A government follows a policy of keeping government spending over a calendar year equal to government revenue over the...

For each item below, indicate whether a debit (DR) or a credit (CR) applies. _____

For each item below, indicate whether a debit (DR) or a credit (CR) applies. _____ a. Decrease in Accounts Payable _____ b. Decrease in Land _____ c. Increase in Retained Earnings _____ d. Increase in Unearned Revenue _____ e. Decrease in Notes Payable _____ f. Increase in Building _____ g. Increase in Wages Expense _____ h. Decrease in Office Supplies _____ i. Increase in Service Revenue _____ j. Increase in Common Stock

For each of the factors listed below indicate whether the factor, independently, is likely to cause...

For each of the factors listed below indicate whether the factor, independently, is likely to cause a particular income producing property to trade for a lower or higher CAP rate compared with an average property. For this question, no explanation is needed. Indicating “higher”, “lower” or “irrelevant” for factors a through g is sufficient. Lower volatility in rent prices and occupancy rates. Worse location High inflation environment High risk premium environment Market general higher than normal expected NOI growth Lower...

Subjects