Explain why given tax may not benefit consumers after all

Reference no: EM131923046

Problem

Suppose you turn on the television to find an ad by a local politician accusing car dealers of making too much money off consumers. As a remedy for this abuse, the official proposes to tax the dealers at a higher rate and reward car buyers with the proceeds of the tax. Drawing on the idea of economic incidence and administrative cost, explain why this tax may not benefit consumers after all.

Reference no: EM131923046

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