Considering the addition of new tax on firms

Assignment Help Business Economics

Reference no: EM13851939

Suppose the government of Washington is considering the addition of a new tax on firms. You have been called in to provide expert analysis on how such a tax would affect employment of labor. There are 3 proposals the government is considering:

1. A tax on every hour an employee works (e.g., “X” cents per hour).

2. A tax on some percentage of the value of the firm’s buildings, land, and machinery (e.g., “Y” percent of the total property value).

3. A tax on every unit of output a firm produces (e.g., “Z” cents per unit of output).

While all the plans have the potential to reduce employment opportunities, which plan would probably have the most favorable impact on employment of labor? Briefly explain your reasoning.

HINT: Compare the plans in terms of their scale and substitution effects.

Reference no: EM13851939

Questions Cloud

What is the local competition? : What is the local competition?

Should the government consider subsidizing lojack purchases : The LoJack car recovery system allows the police to track stolen cars. As a result, they not only recover 90 percent of LoJack-equipped cars that are stolen but also arrest many auto thieves and shut down many "Chop shops" that take apart stolen vehi..

Strategies of risk avoidance : Contribute in the forum by revisiting the activity (mentioned below): produce a ‘top ten' risk list; and consider the 4 strategies of Risk avoidance; Risk acceptance; Risk transference; Risk mitigation and develop controls for the top 10 risks

Each employees salary into retirement account : Currently a firm pays 10% of each employee’s salary into a retirement account, regardless of whether the employee also contributes to the account. Some people at the firm think this change will lead employees to save more and therefore to be able to ..

Considering the addition of new tax on firms : Suppose the government of Washington is considering the addition of a new tax on firms. You have been called in to provide expert analysis on how such a tax would affect employment of labor. There are 3 proposals the government is considering:

The role of power in sexual harassment : Imagine you are the HR manager at a company, and an employee came to you upset because she felt a male co-worker had sexually harassed her by repeatedly asking her out on dates even after she said "no." What would you do

The marginal cost of filling out tax returns : Jose rents office space for $20,000 per year. He uses the office to fill out tax returns for 1

Consumer sales decreased : Suppose that during the past year, the price of a laptop computer rose from $2,100 to $2,550. During the same time period, consumer sales decreased from 470,000 to 363,000 laptops.

Wealth tax-use the labor market theory learned : In 2012, a group in Germany proposed a “wealth tax” -- on building, machinery and equipment—that would be levied on all employers having at least $1.4 million invested in such assets. Use the labor market theory learned in this chapter to analyze the..

User Account

All Pages