Economics 2160A/B Lecture Notes - Lecture 24: Excise, Fuel Tax, User Fee

• School: Western University
• Department: Economics
• Course: Economics 2160A/B
• Professor: Emilie Rivers

Document Summary

Final exam cumulative (2 hours and 40 mc) No tax due on the value added at the tax-exempt stage. But, (cid:455)ou do(cid:374)(cid:859)t get (cid:272)redit for ta(cid:454)es (cid:271)uilt i(cid:374) to (cid:455)our i(cid:374)put (cid:272)osts. Reduces ta(cid:454) re(cid:448)e(cid:374)ue, (cid:271)ut does(cid:374)(cid:859)t eli(cid:373)i(cid:374)ate the(cid:373) *when exemption is at the last stage of (multi-stage) production process. Supplier directly after the tax-exempt (i. e. supplier using tax-exempt item as an input) (cid:272)a(cid:374)(cid:859)t (cid:272)lai(cid:373) (cid:272)redit. Overall tax revenue is greater than if nothing were tax-exempt. In all cases statutor(cid:455) i(cid:374)(cid:272)ide(cid:374)(cid:272)e e(cid:272)o(cid:374)o(cid:373)i(cid:272) i(cid:374)(cid:272)ide(cid:374)(cid:272)e (cid:894)(cid:374)ot the sa(cid:373)e(cid:895) Used houses (residential houses) and housing services (rent do(cid:374)(cid:859)t (cid:272)harge sales ta(cid:454) o(cid:374) rent) In addition to broad-(cid:271)ased ta(cid:454) exci e taxe (cid:894)federal, pro(cid:448)i(cid:374)(cid:272)ial(cid:895) a(cid:374)d exci e dutie (cid:894)federal(cid:895) Excise means specific to the item: for the most part per unit. Which items? (additional per unit tax levied on them) I(cid:374)flue(cid:374)(cid:272)e (cid:271)eha(cid:448)iours (cid:894)do(cid:374)(cid:859)t (cid:271)u(cid:455) these thi(cid:374)gs(cid:895) (cid:862)si(cid:374) ta(cid:454)es(cid:863) People buy them anyways tax revenue increases.