question archive When a government wants to increase tax revenue, they will often increase the sales tax on gasoline
When a government wants to increase tax revenue, they will often increase the sales tax on gasoline
Subject:EconomicsPrice:2.88 Bought3
When a government wants to increase tax revenue, they will often increase the sales tax on gasoline. Using price elasticity of demand, explain why the tax would be placed on gasoline rather than, say, yachts. What might be the long run effect of raising the price of gas? Who is harmed by the tax? Who benefits from such a tax? Are low-income households disproportionately harmed as compared to high-income households? Why?
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