Did luxury tax yield the equity outcome initially expected

Reference no: EM131290819

In 1991 the federal government imposed a 10% "luxury tax" on sales of new recreational boats and on certain other high priced consumer goods. Sales of new recreational boats plummeted causing unemployment among boat building workers. In 1996 this federal tax was repealed. what would habe been the equity based justification for this luxury tax. Draw a diagram similar to figure 2.3. Design your diagram to show the luxury tax incidence spread evenly between the consumer and the producer.Also show a 50% drop i boat sales, after the imposition of the luxury tax. Did the luxury tax yield the equity outcome initially expected? Why?

Reference no: EM131290819

Questions Cloud

Find how much the bank should receive for selling this call : The risk-free rate for 45 days is 11.28 percent. All rates are continuously compounded. Use the Black model to determine how much the bank should receive for selling this call for every $1 million of notional principal.

What is the density matrix for the system : A system is known to be in one of three states. Its probability of being in the first is 1/2 and of being in the second is 1/3. What is the density matrix for the system?

Perfume and the scent permeates from computer : Future Innovation Example: Computers that offer smells - click on the perfume and the scent permeates from your computer. You no longer need to go to the store to see if you like it.

Employment relationship from union member rights : Describe the benefits have nonunion employees have gained in their employment relationship from union member rights?

Did luxury tax yield the equity outcome initially expected : Also show a 50% drop i boat sales, after the imposition of the luxury tax. Did the luxury tax yield the equity outcome initially expected? Why?

Should the company lease the equipments : The companies marginal tax rate is 33%. If the before tax borrowing rate for the company is 12%.

Compute the asset turnover ratio for the year end : Compute the asset turnover ratio for the year end. How does this ratio compare to the industry ratio? What does this tell you about the company? What classifications of debt and/or equity security investments does company hold?

Healthcare medicare/medicaid fraud cases in history : What are the top 3 healthcare medicare/medicaid fraud cases in history?

How did you take the stakeholders into account : Where should your factory be located? Why? Who are the stakeholders in this decision? How did you take the stakeholders into account when making your decision?

User Account

All Pages