BIOL 1001 Chapter : Chapter 1
Document Summary
Information is the most important thing when dealing in game. Imperfect information market participants lack some information relevant to their decisions: one side of market knows more than the other side of the market. Information is costly but potentially available: adverse selection. Every tax causes people and businesses to change their behavior: broad base is necessary to ensure a low rate and also does not allow individuals to avoid taxation. It needs to be fair and equitable: horizontal equity, treats similarly situated taxpayers similarly, vertical equity, persons with more ability to pay will pay proportionately more for public services. The business who then passes it on to the state and federal government. Incidence of taxation: legal incidence, the person who is legally liable to remit the tax to the federal government, state government, or local government, spelled out in statutes, economic incidence.
