What is the revenue-maximizing tax rate

Reference no: EM131204196

Tax revenue is given by R(t) = tB(t), where t [0; 1] is the tax rate and B(t) is the tax base. Suppose that the tax elasticity of the tax base is

a. What is the revenue-maximizing tax rate?

b. Graph tax revenue as a function of the tax rate both for ϒ = ½ and ϒ = 1. Discuss the implications of this Dupuit-Laffer curve

Reference no: EM131204196

Questions Cloud

Outline and explain the purpose and potential benefits : Outline and explain the purpose and potential benefits of standard cost systems and variance analysis. (To gain marks your discussion must not simply be a restatement of the Horngren text).

What percent of american adults sleep : What percent of American adults sleep more than 8 hours on weekdays? What percent of American adults sleep less than 6 hours on weekdays? What percent of American adults sleep between 6 to 8 hours on weekdays?

Preferred stockholders and common stockholders : The Frank Company has issued 10%, fully participating, cumulative preferred stock with a total par value of $300,000 and common stock with a total par value of $900,000. Dividends for one previous year are in arrears. How much cash will be paid to th..

Core and overall rate of pce inflation : What is the difference between the core and overall rate of PCE inflation? Why is the overall rate of inflation lower than the core rate of inflation?

What is the revenue-maximizing tax rate : . Graph tax revenue as a function of the tax rate both for ϒ = ½ and ϒ = 1. Discuss the implications of this Dupuit-Laffer curve

Calculate the sustainable growth rate using financial data : Calculate the sustainable growth rate using the financial data for the most recent year for the company. Show the inputs and the steps to generating the result.

Future implications with the affordable care act : Develop a microeconomic model that is responsive to your local service demands. Communicate how these issues are relevant to the economics of the greater U.S. health care system. What are the future implications with the Affordable Care Act? Use a..

Demand for product could shift : Analyze five reasons why demand for this product could shift. Analyze five reasons why supply for this product could shift.

Advantages and disadvantages of categorical grants : Compare the work incentives of the wage subsidy and the negative income tax for the entire income distribution. Use a diagram and explain.

User Account

All Pages