State A enjoys a prosperous economy, with high real estate values and compensation levels. State B's economy has seen better days-property values are depressed, and unemployment is higher than in other states. Most consumer goods are priced at about 10% less in B as compared to prices in A. Both A and B apply unitary income taxation on businesses that operate in-state. Does unitary taxation distort the assignment of tax able income between A and B? Explain.
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