A senator wants to raise tax revenue and make the workers better off. A staff member...

A senator wants to raise tax revenue and make the workers better off. A staff member proposes raising the payroll tax paid by firms and using part of the extra revenue to reduce the payroll tax paid by workers. Would this accomplish the senator’s goal?

Solutions

Expert Solution

It will not accomplish senator's goal because here labour is the good and wage is the price to be paid.the tax is paid by the firm and the workers will not change as the elasticity of demand and supply of labour decline due to decline in wages.tax is a wedge between what the firms pays and what workers receive so its very clear that it doesn't accomolish the senators goal

Rahul Sunny answered 1 year ago

Next > < Previous

Related Solutions

The Ministry of Labour in Cambonesia wants to make workers better-off without incurring additional expenditure by...

The Ministry of Labour in Cambonesia wants to make workers better-off without incurring additional expenditure by the government. To this end, the Minister proposes to increase the wage tax paid by employers (or, firms) in order to finance a wage subsidy to workers. Would this policy achieve the Ministry’s objective? Discuss your analysis and illustrate with an appropriate diagram. (Hint: It is not necessary to discuss welfare implications involving consumer surplus or producer surplus.)

Would the recycling workers be better off if we banned their jobs?

A, B, C, D. An employer is better off by hiring workers who are dedicated to...

A, B, C, D. An employer is better off by hiring workers who are dedicated to their employer in the long run. Separately answering as parts A, B, C and D, give and briefly explain four different methods that employers use to employ workers who will be committed to their employer.

Virginia State University wants to raise its tuition and increase its revenue. It wants consumers that...

Virginia State University wants to raise its tuition and increase its revenue. It wants consumers that are A. price sensitive B. not price sensitive 7. Moe's restaurant wants to sell more burritos by lowering its price. They want consumers that are not price sensitive.T/F 8. If you want to raise your price and increase your revenues, you need to have consumers that are: A. inelastic B. elastic C. unitary elastic 9.There are no close substitutes for gasoline. For this reason, we can infer that the...

Tariffs never make small countries better off, but there are cases where they can make a...

Tariffs never make small countries better off, but there are cases where they can make a large country better off. Draw side-by-side graphs for a good (call it “toothpicks”) where the small country can produce the good at a lower price than the large country. In this problem: SA : P =5 + 1.1Q DA : P =14 − 1.1Q SB : P =2 + 1.1Q DB : P =10 − 1.1Q Note that there is a worked example similar...

Does trade between the United States and Vietnam make the countries better off or worse off?...

Does trade between the United States and Vietnam make the countries better off or worse off? Imagine the USA can make 4,000,000 cars, 1,000,000 textiles, or some combination of the two, while Vietnam can make 150,000 cars, 950,000 textiles, or some combination of the two. Draw and label PPFs, calculate opportunity costs and label specialization as points A, and state and label an efficient, mutually beneficial trade as points B.

implement a step by step property tax policy to raise the revenue of a city in...

implement a step by step property tax policy to raise the revenue of a city in order to reduce the dependence on state and federal aid. take under consideration the local businesses so that the poor dont get affected by the policy Implement a policy to raise property tax on businesses in order to raise revenue for a city

Consider three possible taxes that would raise the same revenue: A) a property tax on the...

Consider three possible taxes that would raise the same revenue: A) a property tax on the value of real estate, B) a per-unit tax on soft-drinks, and C) a sales tax on staple foods. a. Rank the three taxes based on their economic efficiency in raising revenue. Explain. (You may refer to them by letter) b. Explain why a policymaker might choose a different rank ordering of the three taxes when choosing which to implement.

To raise revenue, a city is planning to impose a $5 tax per ticket for tickets...

To raise revenue, a city is planning to impose a $5 tax per ticket for tickets to music concerts held in the city. The mayor is deciding between two ways of implementing the tax policy. The first way is to collect the $5 tax per ticket from the concert performers (the producers of concerts). The second way is to collect the $5 tax per ticket from the concert-goers (the consumers of concerts). An assistant to the mayor says the first...

Suppose the U.S. government has to raise a given amount of tax revenue by taxing two...

Suppose the U.S. government has to raise a given amount of tax revenue by taxing two goods with different elasticities of demand. What policy advice could you provide that would minimize the welfare cost of taxation? Do government excise tax policies seem to follow your advice? Give some examples and/or counter-examples.

Subjects