eco 100 wk 2 - Taxes on cars 1 Sheri Brown ECO 100 Taxes on...

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Taxes on cars 1 Sheri Brown ECO 100 Taxes on Cars Instructor Turner July 12, 2010
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Taxes on cars 2 Taxes on New Cars Excise tax is mainly a tax put in place on items of certain demand to raise revenue for states to pay for improvements to the infrastructure. People are aware of such taxes on cigarettes and alcohol. Most recently South Carolina raised cigarette taxes another 50 cents a pack July 1, 2010. The expected 150 million dollars it raises will go to health care costs. Finding ways to tax items to raise money for infrastructure improvements is always a hard balancing act between knowing how the new tax will affect the elasticity of demand, and the margin of revenue expected to be raised. Based on my observations of what cars and new car sales are doing to our economics, I would chose to raise the New Car Sales Tax. This would raise money needed to recycle old cars, reduce waste, reduce our ecological footprint and provide incentive to buy older, very reliable cars. The demand for new cars will always be high.
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