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Unformatted text preview: EX: 7% o Tax Base: EX: purchases of non food items Is inversely related to tax rate o Some optimal rate will maximize revenue o Revenue = rate * base • Slide 11 o The change in the tax base is larger than the change in tax rate o Above t* base wins: Revenue moves in same direction o The change in the tax rate is larger than the change in the tax base o Below t* Revenue moves with rate • Slide 12 o Credit = incentive o Who is behind the passage of this act? Farm lobby o What affect has it had on the SUV market? Weight of SUV includes cargo Demand skyrocketed...
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- Winter '09
- Supply And Demand, Taxation in the United States, gas tax