Mandy, the mayor of Bogart and a strong advocate of a clean downtown, is proposing an increase in the city sales tax from 7 percent to 50 percent on all packs of chewing gum purchased in Bogart. Based on the current gum sales, Mandy estimates that this tax will actually reduce the tax revenue on gum sales. What type of forecasting is Mandy using to derive her tax revenue estimates? What "effect" is her estimate based on? Does this necessarily imply that Mandy will be happy given her desire to have a clean downtown?
What will be an ideal response?
Mandy's forecast is based on dynamic forecasting (i.e., she is considering how taxpayers may alter their activities in response to the tax law change). Given that Mandy is projecting a decrease in tax revenues, her estimates must be based on the substitution effect-i.e., taxpayers are likely to substitute nontaxable activities (e.g., simply not purchase gum) for taxable purchases. The decreased tax revenue from gum sales does not necessarily imply that Mandy will achieve a cleaner city, as taxpayers may simply buy their gum outside the city. This will depend on how close the city is to other towns/neighborhoods that do not impose the high gum tax.
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You have been asked to compile a summary of your company's current competitive position for a specific product line. The report will be used as a key input to business and product goal setting for the coming year. Define the four factors you will need to consider to ensure the usefulness of the report and provide an example of how you could incorporate each factor.
What will be an ideal response?
With the value assessment method _______ supplier personnel (or their consultants) conduct interviews and often gather data at customer firm(s) to provide a comprehensive listing of benefit and cost elements associated with usage of the supplier's
market offering compared with the incumbent or next-best-alternative offering. a. internal engineering assessment b. field value-in-use assessment c. indirect survey questions d. focus group value assessment
On a statement of cash flows prepared using the direct method, cash received from selling merchandise is considered a ________
A) cash inflow from investing activities B) cash inflow from operating activities C) cash outflow from financing activities D) cash outflow for financing activities
A railroad would not be liable as an insurer of a passenger's baggage if the baggage were stolen or destroyed by
a. an invading army. b. a group of angry rioters. c. railroad employees. d. hijackers.