In early 2003, President Bush proposed eliminating the taxation of dividends to shareholders on the grounds that it was double taxation. Corporations pay taxes on the earnings that are later paid out in dividends. In a poll of 671 Americans, TechnoMetrica Market Intelligence found that 47% favored the proposal, 44% opposed it, and 9% were not sure (Investor's Business Daily, January 13, 2003). In looking at the responses across party lines the poll showed that 29% of Democrats were in favor, 64% of Republicans were in favor, and 48% of Independents were in favor.
a. How many of those polled favored elimination of the tax on dividends?
b. What is the conditional probability in favor of the proposal given the person polled is a Democrat?
c. Is party affiliation independent of whether one is in favor of the proposal?
d. If we assume people's responses were consistent with their own self-interest, which group do you believe will benefit most from passage of the proposal?