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ECO/204 ECO/204 WEEK 4 DISCUSSION 2 -TAX BASE PRINCIPLES OF MICROECONOMICS -ANSWER KEY

ECO/204 ECO/204 WEEK 4 DISCUSSION 2 -TAX BASE PRINCIPLES OF MICROECONOMICS -ANSWER KEY
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ECO/204 WEEK 4 DISCUSSION 2 -TAX BASE PRINCIPLES OF MICROECONOMICS

Discussion 2 - Tax Base

Suppose a special tax was introduced that used the value of one’s automobile as the tax base. Each person would pay taxes equal to 10 percent of the value of his or her car. Would the tax be proportional, progressive, or regressive? What assumptions do you make in answering this question? Do you think the tax that was imposed either efficient or equitable?

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