Question: In 2002 the US federal government levied a tax of
In 2002, the US federal government levied a tax of 3 percent on that part of a car’s price exceeding $ 40,000. [For example, the tax liability on a $ 50,000 car would be 0.03 ($ 50,000 $ 40,000), or $ 300.] Discuss the efficiency, equity, and administrability of this “luxury car tax.”
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