tag:blogger.com,1999:blog-1735628051336217048.post6847971321897896610..comments2024-02-24T04:08:30.728-05:00Comments on MV=PQ: A Resource for Economic Educators: Value-Added TaxTim Schillinghttp://www.blogger.com/profile/09159198592921510105noreply@blogger.comBlogger9125tag:blogger.com,1999:blog-1735628051336217048.post-80108077370118648392010-04-06T10:38:40.656-04:002010-04-06T10:38:40.656-04:00Lisa,
What do yo uthink we will do in good times?...Lisa,<br /><br />What do yo uthink we will do in good times? John Maynard Keynes, who was among the first to advocate deficit spending in times of severe recession and unemployment, also advocated cutting government spending and raising taxes in good times to generate offsetting surplusses. Do you see that happening? What do you think would be the consequences for any politician who advocated higher taxes and reduced spending?Tim Schillinghttps://www.blogger.com/profile/09159198592921510105noreply@blogger.comtag:blogger.com,1999:blog-1735628051336217048.post-83796412339680280662010-04-06T10:36:37.439-04:002010-04-06T10:36:37.439-04:00Ms. Kirkland,
You also have hit the nail on the h...Ms. Kirkland,<br /><br />You also have hit the nail on the head. Anything connected to rising levels of obesity is being treated like alchohol and tobacco. Let the people who use it pay for the consequences.<br /><br />But another aspect of the decision is the possibility that the people imposing the taxes believe our demand is relatively inelastic (like tobacco), and that they can raise taxes without seeing a corresponding change in behavior. That would mean more tax revenue on little change in behavior. <br /><br />The question is, will consumers of soft drinks and other "unhealthy foods" change their behavior significantly, or will they respond as many smokers do and just grumble and keep the behavior?Tim Schillinghttps://www.blogger.com/profile/09159198592921510105noreply@blogger.comtag:blogger.com,1999:blog-1735628051336217048.post-71569554618351673072010-04-06T10:32:36.937-04:002010-04-06T10:32:36.937-04:00Yadira,
You asked the big question. And the answ...Yadira,<br /><br />You asked the big question. And the answer lies in the statement "People respond to incentives."<br /><br />Despite what many may say, politicians are people and they like security (keeping their job). Consequently, they are more likely to do what endears them to their voters. And voters prefer to pay fewer taxes and benefit from more spending. And if every politician is judged by similar criteria, you've set up an incentive system that rewards spending and penalizes taxes - resulting in deficits.Tim Schillinghttps://www.blogger.com/profile/09159198592921510105noreply@blogger.comtag:blogger.com,1999:blog-1735628051336217048.post-46367358794642380822010-04-06T00:15:55.942-04:002010-04-06T00:15:55.942-04:00We have touched a little on fiscal policy today in...We have touched a little on fiscal policy today in class. From what I understand, when an economy is in a recession or a depression it is best to spend government money and cut taxes, all for the obvious reasons that it promotes consumer spending and stimulates the economy. However, the bad side will be of course deficit spending. As we all know, Obama has spent a ton of money in the past year alone to stimulate everything, but how do we expect to pay back what we have spent? What things in good times should we do to counteract the spending in bad? and will it be enough?Lisa Perforsnoreply@blogger.comtag:blogger.com,1999:blog-1735628051336217048.post-38902616794118056912010-04-06T00:04:46.065-04:002010-04-06T00:04:46.065-04:00As I understand, sometimes sales taxes may be used...As I understand, sometimes sales taxes may be used to make unhealthy products more expensive and reduce the consumption of that product. This was done before with cigarettes, and now it is much harder to afford smoking, let alone find somewhere to do it. Do you think that this could be why they are pushing sales tax on soft drinks? Could this be a move toward lowering the obesity rate or just simply cutting back on carbonated drinks?Brady Elizabeth Kirklandhttps://www.blogger.com/profile/03928986220772058983noreply@blogger.comtag:blogger.com,1999:blog-1735628051336217048.post-39424417708772883092010-04-05T22:50:46.252-04:002010-04-05T22:50:46.252-04:00If the fiscal policy, as what I understood from my...If the fiscal policy, as what I understood from my teacher, involves the government spending more or less depending on the situation. Then why is it that the government spends more (increasing the defecit), and taxes also go up(which should go down)? Doesn't that make the economy be worse off?Yadiranoreply@blogger.comtag:blogger.com,1999:blog-1735628051336217048.post-45814787195979579832010-04-05T22:01:38.708-04:002010-04-05T22:01:38.708-04:00I know I stay away from Cook to purchase anything ...I know I stay away from Cook to purchase anything because sales tax is around 9.5%.<br /><br />Separate chat: Could the government nationalize all taxes and apply their own additional ones if need be? Consequence?<br /> I was told today that I sounded like Mussolini when I suggested the government raise taxes, which would lower peoples ability to spending, but the gov't would then spend that money to lower prices. This way the government is spending money which increases GDP and they can have high taxes.<br />Are there more benefits I'm not remembering from this morning? What are the cons?TheTeetorhttps://www.blogger.com/profile/09177823058874696809noreply@blogger.comtag:blogger.com,1999:blog-1735628051336217048.post-58608848155089952092010-04-05T19:42:53.007-04:002010-04-05T19:42:53.007-04:00The state of Illinois levies a straight percentage...The state of Illinois levies a straight percentage sales tax in all counties. Individual counties and municipalities are allowed by the state to levy an additional tax on top of the state sales tax.<br /><br />I know we have readers in Illinois. Perhaps they can provide the details of the percentages. I don't recall exactly what the split was. But Chicago/Cook was 8.5% when we moved to VA, as I recall, and the county I lived in was 6% (I think).Tim Schillinghttps://www.blogger.com/profile/09159198592921510105noreply@blogger.comtag:blogger.com,1999:blog-1735628051336217048.post-34612014964705276312010-04-05T19:34:32.274-04:002010-04-05T19:34:32.274-04:00Why do they have different sales taxes if they ar...Why do they have different sales taxes if they are all within Illinois?Megan M. Oramahttps://www.blogger.com/profile/13154697518703267990noreply@blogger.com