A city government increased its local sales tax from 1 percent to 2 percent of the dollar value of consumer goods purchased in the city. However, the city’s sales tax revenues increased by only 30 percent after the doubling of the tax rate. What factors might account for this result?
Answer to relevant QuestionsBoth the federal government and many states impose so-called sin taxes: excise taxes levied on the retail sale of liquor and cigarettes. Discuss the reasons why sales of these particular items make a good tax base. The Green River, which is heavily polluted by industrial waste, flows through State S. Eighty-five companies operate manufacturing facilities that border the river. State S recently enacted legislation requiring each company ...Mr. JK, a U.S. citizen and resident of Vermont, owns 100 percent of the stock of JK Services, which is incorporated under Vermont law and conducts business in four counties in the state. JK Services owns 100 percent of the ...Firm L, which operates a mail-order clothing business, is located in State L. This year, the firm shipped $18 million of merchandise to customers in State R. State R imposes a 6 percent sales and use tax on the purchase and ...Jurisdiction R and Jurisdiction S both impose a personal income tax on their residents. Under Jurisdiction R’s system, employers are required to withhold income tax from their employees’ paychecks and remit the tax to ...
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