Suppose you have been hired by President Emmanuel Macron of France as an economic policy consultant. In order to finance an increase in unemployment benefits, the French government needs to raise €10 billion in additional tax revenue. President Macron is considering two policies to achieve this goal: a new tax on gasoline or a new tax on bequests (money left to your children or other heirs). Which of these two policies would be the most economically efficient? Why? Explain why the policy you recommended in a.) might be politically unpopular. Dismayed by your assessment, President Macron proposes a third alternative: a broad decrease in current taxes. Explain why this could increase tax revenue for the French government, but it is unlikely to work in practice.
Suppose you have been hired by President Emmanuel Macron of France as an economic policy consultant. In order to finance an increase in unemployment benefits, the French government needs to raise €10 billion in additional tax revenue. President Macron is considering two policies to achieve this goal: a new tax on gasoline or a new tax on bequests (money left to your children or other heirs). Which of these two policies would be the most economically efficient? Why? Explain why the policy you recommended in a.) might be politically unpopular. Dismayed by your assessment, President Macron proposes a third alternative: a broad decrease in current taxes. Explain why this could increase tax revenue for the French government, but it is unlikely to work in practice.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
- Suppose you have been hired by President Emmanuel Macron of France as an economic policy consultant. In order to finance an increase in
unemployment benefits, the French government needs to raise €10 billion in additional tax revenue. President Macron is considering two policies to achieve this goal: a new tax on gasoline or a new tax on bequests (money left to your children or other heirs).
- Which of these two policies would be the most economically efficient? Why?
- Explain why the policy you recommended in a.) might be politically unpopular.
- Dismayed by your assessment, President Macron proposes a third alternative: a broad decrease in current taxes. Explain why this could increase tax revenue for the French government, but it is unlikely to work in practice.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education