This discussion question has two parts, a and b. Be sure to answer both parts: a.) Explain reasons sales tax is basically equitable or not equitable by discussing the hypothetical example below. b.) Explain what makes sales tax an example of a regressive, progressive, or flat tax by explaining how it differs from the other two types of taxes. Use this hypothetical example of average tax rates (a better measure of tax equity than marginal tax rates) paid by two consumers/tax payers in San Francisco assuming the only tax is sales tax of 10% which is levied on all purchases: Jenny who lives in San Francisco, earns $30,000 income per year, pays a 10% sales tax rate on everything she purchases (rent, food, entertainment, transportation, etc.), spends all $30,000 income (not hard to do in S.F. on her income) so she effectively pays $3,000 taxes on $30,000 income. Calculate her average tax rate (average tax-total tax/total income). Then, compare and contrast her average tax rate (equity-wise) with a consumer/tax payer named Julio who also lives in San Francisco, earns $100,000 income per year, pays a 10% sales tax rate on everything he purchases (rent, food, entertainment, transportation, etc.), and spends identically to Jenny i.e. $30,000 of his income. How much is his average tax on his $100,000 income. Calculate his average tax rate.

Case II: Attached is a graph diagram depicting the market for soft drinks. If an excise tax equal to $1 per liter is levied on soft drink sellers, please answer the following questions: i. The government revenue from this tax would be $___________ million. ii. $___________ million of this revenue would be paid by buyers in the form of higher prices. iii. $____________ million of this revenue would be paid by sellers in the form of reduced income.

Attached is a graph diagram depicting the market for soft drinks. If an excise tax equal to $1 per liter is levied on soft drink sellers, please answer the following questions: 1. Buyers would spend a total of $___________ million on soft drinks. 2. Sellers would receive a total of $____________ million (after-tax) from selling soft drinks. 3. The government revenue from this tax would be $____________ million.

Is the tax imposed on cigarettes a progressive, proportional, or a regressive form of taxation? Why? What are some other examples of this type of tax?

Please don't give wrong answers

1. What is the relative importance of taxation to the economy of the country? Give at least three and discuss each clearly. 2. Once a government makes "sin taxes" a significant part of its revenue stream, it has an incentive to keep people smoking and drinking. If everyone quits smoking, the government does not get any cigarette tax revenue. Is it really a good idea to fund public services on the back of citizens' addictions?

Figure 1 P Py A Px B Pz CAN D Qy Qx S D MULTIPLE CHOICE. Questions 1-7 refer to Figure 1 above, which shows a market in which a per-unit excise tax has been imposed. Enter the lowercase letter corresponding to your answer into Canvas. 1. [3] The statutory incidence of the tax: (a) is on the producer only. (b) is on the consumer only. (c) is partly on the producer and partly on the consumer. (d) cannot be determined from the information provided.

1) Suppose the figure represents the Laffer Curve for income taxes on high-income earners. If the tax rate on high-income earners is 55% a) marginal tax revenue will increase if tax rates are increased. b) marginal tax revenue is negative. c) the tax rate is optimal. d) marginal tax revenue is positive.   2) Suppose the figure represents the Laffer Curve for income taxes on high-income earners. Which of the following best explains the shape of the Laffer Curve? a) As tax rates rise, individuals work the same amount but conceal more income from tax authorities. b) As tax rates rise, individuals work the same amount and the same amount of income is available to tax. c) As tax rates rise, individuals work more and more income is available to tax. d) As tax rates rise, individuals work less and less income is available to tax

In the diagram to the right, illustrating a per-unit tax equal to P, minus Pa, tax revenue is represented by the areas V and the excess burden of the tax is represented by areas D P3 F Quantity (milions per year)

How can the relative levels of taxes impact relationships between states? For instance, what is likely to happen when New York (under the START-UP NY program) offers tax breaks to companies that are willing to relocate to the state?   a. Generate federal government jobs   b. Increase the Supreme Court's power   c. Lower federal budgets   d. Increase competition among states   e. Increase public funding