Levied to reduce consumption of goods-to raise tax revenue

Assignment Help Business Economics

Reference no: EM131002379

Taxes on goods and services like alcohol, tobacco, and gambling winnings (and maybe someday sugary foods and marijuana) are levied to reduce consumption of such goods and to raise tax revenue (for example, President Obama's proposed fiscal-year 2015 federal budget, released March 4th, 2014, included a 94 cents-per-pack increase in the federal cigarette tax rate and a proportionate 93% increase in all other tobacco tax rates; these are estimated to raise $78 billion over the 10-year time period from 2014 through 2024 -- click here for the National Association of Tobacco Outlets, Inc. (NATO)'s description of the new tax rates for cigarettes and tobacco products). How effective do you think these types of taxes are in achieving these two goals? Include in your post how price elasticity of demand for these goods influences consumption and tax revenue.

Reference no: EM131002379

Questions Cloud

How much work does it take to slide a box : How much work does it take to slide a box 38 meters along the ground by pulling it with a 200 N force at an angle of 13o from the horizontal?

Always round tire finds the following cross elasticity : Always Round Tire finds the following cross elasticity:

Demand curve for gasoline shifts rightward : Suppose the US demand curve for gasoline shifts rightward, and the U.S. supply curve for gasoline remains unchanged. As a result, the price of gasoline increases by 9 percent, and the equilibrium quantity increases by 3 percent. Which of the followin..

Find efficient equilibrium and the level of marginal profit : Suppose the demand for a chemical is given by Q=100-3P, where quantity is measured in pounds. The market supply is given by MC = 6. Assume the social marginal cost of this product is $8 per unit. a. Find the competitive equilibrium and the level of m..

Levied to reduce consumption of goods-to raise tax revenue : Taxes on goods and services like alcohol, tobacco, and gambling winnings (and maybe someday sugary foods and marijuana) are levied to reduce consumption of such goods and to raise tax revenue (

Determine the test statistic : For each data set, determine the test statistic, T +. What percentage of the observations in each data set has plus signs? Informally, what does this indicate about the possibility that the true median in each case is as postulated?

The prescribed accounting treatment for stock dividends : The prescribed accounting treatment for stock dividends implicitly assumes that shareholders are fooled by small stock dividends and benefit by the market value of their additional shares. Explain this statement. Is it logical?

What would be the average lifetime of muons : When muons traveled through the laboratory at a speed of 0.99c, scientists obtained an average lifetime value of 15.5 is before a muon decayed. If the muons were at rest in the laboratory, what would be the average lifetime of muons?

How many months will it take to pay for the building? : A building is priced at $250,000. If a down payment of $25,000 is made and a payment of $5000 every month thereafter is required, how many months will it take to pay for the building? Interest is charged at a rate of 9% compounded monthly.

User Account

All Pages