Last+class - Announcements Finals: 10:10 Weds Dec 16,...

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Unformatted text preview: Announcements Finals: 10:10 Weds Dec 16, 7:45am GLC64 11:15 Mon Dec 14, 3:25pm GLC64 Office hours this week: W,TH,F 2-4 or by appt. Office hours next week Monday 1-2:30, Tues 1-4. Practice Qs for taxes and trade are on Scholar. Final HW and iClicker grades will be posted by Friday. 1 of 29 After MT3: Taxes Tax base, tax rate structure Taxes on stocks vs. taxes on flows (most taxes are on flows income, sales, etc) Progressive, regressive, proportional taxes. Marginal vs. average tax rate. Tax incidence: who pays the tax? Burden of a tax: taxes cause deadweight loss or burden because they distort peoples behavior. Taxes usually move us away from efficiency. Taxes move us toward efficiency if there is a negative externality. Neutrality more neutral taxes create less distortion and are better. S t S D S t S D Effects of price elasticity of D on tax incidence 3 $0.20 Tax Price per ounce $1.15 1.00 0.95 Millions of ounces per day 10 9 $0.20 Tax 10 7 Price per ounce $1.05 1.00 0.85 (a) Less elastic demand (b) More elastic demand The more elastic the D curve, the more tax is paid by producers (lower net-of-tax receipt)...
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Last+class - Announcements Finals: 10:10 Weds Dec 16,...

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