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Chapter 6: Q. e (page 134)

Why might people be willing to sacrifice dollars to avoid "feeling bad" about flouting tax laws?

Short Answer

Expert verified

Yes.

Step by step solution

01

Step1. Given information

People willingly sacrifice some dollars to avoid feeling bad about flouting tax laws.

02

Step2. Explanation

Flouting tax laws is avoiding/evading taxes. If they have to sacrifice some dollars say for some public work, or funds, etc, they would "feel better" about flouting taxes. The burden of ethics might reduce linked to it by convincing self of spending directly for the public welfare.

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Most popular questions from this chapter

Distinguish between average tax rates and marginal tax rates.

Consider Figure 6-3. Suppose that the government raises its sales tax from 4 percent to 6 percent. Does the direction of the effect on government's tax revenue indicated by the figure's dynamic tax analysis accord with the prediction that would have been forthcoming from static tax analysis? Explain briefly.

The sales tax rate applied to all purchases within a state was 0.04 (4 percent) throughout 2016 but increased to 0.05 (5 percent) during all of 2017. The state government collected all taxes due, but its tax revenues were equal to $40 million each year. What happened to the sales tax base between 2016 and 2017? What could account for this result?

Suppose that a state has increased its sales tax rate every other year since 2009. Assume the state collected all sales taxes that residents legally owed. The table below summarizes its experience. What were total taxable sales in this state during each year displayed in the table?

Consider Figure 6-3. Suppose that the government raises its sales tax from 6 percent to 8 percent. Are the predictions of static analysis and dynamic tax analysis in agreement on the direction of the change of government's tax revenue? Explain briefly.
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