ECON 262
1. Besides raising revenue for the government, what is another reason the government/politicians might want to levy a tax? Explain.
2. If the government levies a tax on Bob, does that necessarily mean the statutory tax incidence will fall on him? Explain and give an example.
3. What is the difference between the statutory incidence of a tax and the economic incidence of a tax? Explain with examples.
4. Explain why an increase in the income tax rate might not mean an increase in tax revenue for the government. Or put another way, can a decrease in the income tax rate lead to an increase in tax revenue for the government? Explain.
5. What questions do you still have about this material?