ECON 101 2Midtermreview

Import quotas when the canadian government imposes

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Unformatted text preview: and grey areas. Taxes Ø། Everything you earn and most things you buy are taxed. Ø། Who really pays these taxes? Ø། Income tax and the social insurance taxes are deducted from your pay, and provincial sales tax and GST are added to the price of the most of the things you buy, so isn’t it obvious that you pay these taxes? Ø། Isn’t it equally obvious that your employer pays the employer’s contribution to the social insurance tax? Ø། You’re going to discover that it isn’t obvious who pays a tax and that lawmakers don’t decide who will pay! Tax Incidence Ø། Tax incidence is the division of the burden of a tax between buyers and sellers. Ø། When an item is taxed, its price might rise by the full amount of the tax, by a lesser amount, or not at all. Ø། If the price rises by...
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This note was uploaded on 03/29/2014 for the course ECON 101 taught by Professor Vanderwaal during the Spring '08 term at Waterloo.

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