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Author Question: Assume the government was to levy a tax of 100 per person on every individual in the country. Would ... (Read 152 times)

ap345

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on: Jun 29, 2018
Assume the government was to levy a tax of 100 per person on every individual in the country. Would this tax be characterized as proportional, progressive or regressive? Make sure to explain your reasoning.
 
  What will be an ideal response?

Question 2

Why might an automobile labor union lobby Congress to place tariffs on labor-saving devices like automated welding and riveting machines? Why might this be a mistake?
 
  What will be an ideal response?


potomatos

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Reply #1 on: Jun 29, 2018
Answer to Question 1

This would be a regressive tax. The reason is that as incomes rise people will bear a lower average tax rate and vice versa.

Answer to Question 2

The automobile union may lobby Congress to place tariffs on these devices because it views them as a substitute for their labor. While this may be true it is overlooking the fact there is also an output effect at work at the same time, which may actually allow the automobile manufacturer to hire more workers.


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