Finance emergency road and bridge improvements

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Reference no: EM131003238

Consider a state debating how to finance emergency road and bridge improvements. Among the possibilities are increased fees on driver’s licenses, a personal property tax on motor vehicles, a tax on automobile parts (including tires), and a higher taxes on cigarettes and liquor. Which of these taxes are benefit taxes, which are corrective taxes, which are both? Which of these taxes is least distortionary?

Reference no: EM131003238

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