Public Finance and Taxes 1 The increased suburbanization of urban population was an important social

Public Finance and Taxes

1 The increased suburbanization of urban population was an
important social phenomenon of the 1960s and 1970s in metropolitan areas in the
United States Explain how the decision to migrate to another jurisdiction in a
metropolitan area is influenced by policies of central city and suburban
government policies What steps could central city government use to encourage
the return of the middle-income class to the city? Explain why regressive taxes
may be necessary to retain middle- and upper-income residents in the city

2 A 10-percent tax is levied on the sale of soft drinks
This tax is collected from the sellers of the drinks A critic of the tax
argues that the sellers will shift the entire tax to the buyers and therefore
be no worse off Evaluate this argument by showing the market conditions that
would have to prevail for the prediction to be correct Indicate under what
circumstances the tax will be shared by the buyers and the sellers of soft
drinks