Question

What is a lump sum tax? What are the desirable and undesirable aspects of using a...

What is a lump sum tax? What are the desirable and undesirable aspects of using a lump-sum tax to finance government expenditures?

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

A lump sum tax is the amount of tax which is fixed for all. It is independent of incomes and facility uses. The advantage of using the lump sum tax is that it is non-discriminatory and doesn't depend on incomes or other things. It is not progressive in nature and doesn't kill the incentives. The disadvantage of using such tax is that it is same for poor and rich and thus discrminatory when it comes to the sacrifice of utility or the disutility. It is regressive in nature.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
What is a lump sum tax? What are the desirable and undesirable aspects of using a...
What is a lump sum tax? What are the desirable and undesirable aspects of using a lump-sum tax to finance government expenditures? h. What influence the magnitude of the total excess burden of a tax? If we were to have zero excess burden, how elastic should the supply or demand of a good should be?
Economic Analysis of Taxation g. What is a lump sum tax? What are the desirable and...
Economic Analysis of Taxation g. What is a lump sum tax? What are the desirable and undesirable aspects of using a lump-sum tax to finance government expenditures? h. What influence the magnitude of the total excess burden of a tax? If we were to have zero excess burden, how elastic should the supply or demand of a good should be? i. What is the efficiency loss ratio of a tax? How is it used in designing a tax? j. What...
Show that the consumer is better off with a lump-sum tax rather than a proportional tax...
Show that the consumer is better off with a lump-sum tax rather than a proportional tax on wage income (as in question 3) given that either tax yields the same revenue for the government. You must use a diagram to show this. (Hint: The consumption bundle the consumer chooses under the proportional tax must be just affordable given the lump-sum tax.)
Suppose that the government imposes a lump-sum tax on goods produced by a firm. Determine the...
Suppose that the government imposes a lump-sum tax on goods produced by a firm. Determine the effect of this tax on the firm’s demand for labor?
What is meant by financing? What are its desirable and undesirable effects? 300 word n less
What is meant by financing? What are its desirable and undesirable effects? 300 word n less
If you need to compute convexity of a fixed-income security what would be desirable or undesirable...
If you need to compute convexity of a fixed-income security what would be desirable or undesirable convexity for an FI? Explain your answer (not more than 100 words).
What are the desirable and undesirable characteristics of each model for the doctor-patient or scientist-subject relationship,...
What are the desirable and undesirable characteristics of each model for the doctor-patient or scientist-subject relationship, if any, and why do you think so? Include the ideas of philanthropy, proficiency, loyalty and responsive obligation in your answer. BE SURE that you include the ideas of philanthropy, proficiency, loyalty and responsive obligation in your answer.
Suppose the foreign government increases its Lump Sum Taxes. Using appropriate diagrams for the foreign exchange...
Suppose the foreign government increases its Lump Sum Taxes. Using appropriate diagrams for the foreign exchange markets of "e" and "x" (1 diagram for each market) explain what happens to the value of the dollar (and why) from this fiscal policy change.
Suppose that the government decides to impose an income tax as opposed to a “lump sum”...
Suppose that the government decides to impose an income tax as opposed to a “lump sum” tax. We can now model the economy as follows. C=100+.75YD    I=200   G=300       Where Yd = Y - T = Y - .2Y and .2 represents a 20% income tax. 1. Solve for equilibrium income in this case. Graph this economy and the economy we modeled in question 2 on the same graph. Why do they differ? 2. What is the size of...
1. The lump sum principle says...? All taxes make a consumer equally unhappy A tax on...
1. The lump sum principle says...? All taxes make a consumer equally unhappy A tax on one good make a consumer happier than an equivalent revenue lump sum tax. A tax on one good make a consumer less happy than an equivalent revenue lump sum tax. Tax revenues should only be used as a lump sum, not split up among many projects A tax on one good should be kept small. 2. For normal goods…? A change in income causes...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT