Explain why the tax on taxi rides is a good idea

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Suppose the city of Washington is committed to raising $250 million for a new arena. The mayor suggests putting a tax on taxi rides since out-of-towners disproportionately use taxis. Evaluate the economics of this policy decision. Carefully explain why the tax on taxi rides is a good idea or why the tax is a bad idea.

Reference no: EM131103636

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