Special Tax on Automobiles
Not what you're looking for?
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?
Purchase this Solution
Solution Summary
Proportional, progressive, and regressive tax rates are examined. The assumptions required to answer the questions are determined. Whether the expert thinks the tax was imposed either efficient or equitable are determined.
Solution Preview
This is a tricky because it would be progressive, proportional or regressive depending on the individual. A person who makes a lot of money might end up paying very little or nothing if they drive a very old car or have no car, while someone who is relatively poor but decides they really need a convertible BMW would be paying more. That said, we can average everyone out and assume that the richer you are, the more expensive your car. This seems like a fair assumption. This still doesn't solve the problem. ...
Purchase this Solution
Free BrainMass Quizzes
Elementary Microeconomics
This quiz reviews the basic concept of supply and demand analysis.
Economics, Basic Concepts, Demand-Supply-Equilibrium
The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.
Pricing Strategies
Discussion about various pricing techniques of profit-seeking firms.
Economic Issues and Concepts
This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.
Basics of Economics
Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.