If the Government Is Most Interested in Minimizing Excess Burden

question 103

Essay

If the government is most interested in minimizing excess burden of an excise tax, should it impose the tax on goods that are elastic or on goods that are inelastic?

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Definitions:

Poverty Income Threshold

The Poverty Income Threshold is the minimum level of income deemed necessary to achieve an adequate standard of living, used to identify those living in poverty.

Inflation

A general rise in the price level.

Public Assistance

Government programs designed to provide financial aid to individuals and families in need, including healthcare, food assistance, and housing subsidies.

Economic Conditions

The state of an economy at a given time, including factors like unemployment rates, inflation rates, and GDP growth.