Question: Suppose that a state has increased its sales tax rate every other year since 2003. Assume that the state collected all sales taxes that residents

Suppose that a state has increased its sales tax rate every other year since 2003. Assume that the state collected all sales taxes that residents legally owed. The table on the facing page summarizes its experience. What were total taxable sales in this state during each year displayed in the table?

Year Sales Tax Rate Sales Tax Collections 2003 2005 2007 2009 2011 0.03 (3 percent) 0.04 (4 percent) 0.05 (5 percent) 0.06 (6 percent) 0.07 (7 percent) $9.0 million $14.0 million 20.0 million 24.0 million $29.4 million

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