This paper concentrates on the primary theme of TAX REVENUE IS GIVEN BY R(T) = TB(T), WHERE T [0; 1] IS THE TAX RATE AND B(T) IS THE TAX BASE…. in which you have to explain and evaluate its intricate aspects in detail. In addition to this, this paper has been reviewed and purchased by most of the students hence; it has been rated 4.8 points on the scale of 5 points. Besides, the price of this paper starts from £ 40. For more details and full access to the paper, please refer to the site.
Tax revenue is given by R(t) = tB(t), where t [0; 1] is the tax rate and B(t) is the tax base. Suppose that the tax elasticity of the tax base is
a. What is the revenue-maximizing tax rate?
b. Graph tax revenue as a function of the tax rate both for ϒ = ½ and ϒ = 1. Discuss the implications of this Dupuit-Laffer curve.