Author Question: You are a government tax policy advisor. You are asked how to convert the U.S. income tax into a ... (Read 19 times)

lindiwe · **on:** Jul 1, 2018

You are a government tax policy advisor. You are asked how to convert the U.S. income tax into a consumption tax. Which of the following is the best response?

a. It already is a consumption tax.
b. Flatten the brackets into one rate.
c. Exclude the first 25,000 of income.
d. Allow unlimited contributions into IRAs

Question 2

One reason the U.S. government might subsidize research of an alternative to crude-oil based gasoline is that

A) more substitutes will reduce the price of crude-oil based gasoline.
B) more substitutes will increase the elasticity of crude-oil based gasoline.
C) more substitutes will reduce the impact of supply shocks on the price of crude-oil based gasoline.
D) Any or all of the above.