A local government currently has a tax base of $10 billion and a tax rate of 10 percent. If the tax rate is increased to 12 percent, the tax base becomes $8.5 billion. If the goal is to maximize tax revenues the tax rate should be
A) raised above 12 percent.
B) kept at 10 percent.
C) raised to 12 percent.
D) abolished.
B
Economics
You might also like to view...
Refer to the data. Plan C entails:
The following data are for a series of increasingly extensive flood control projects:
A. marginal benefits in excess of marginal costs.
B. fewer spillovers than either Plan A or Plan B.
C. an overallocation of resources to flood control.
D. an underallocation of resources to flood control.
Economics
Net capital inflows equal:
A. domestic production. B. capital outflows minus capital inflows. C. international production. D. capital inflows minus capital outflows.
Economics