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1.Suppose the government introduces a $1000 poll tax and reduces the personal income tax rate so that total tax revenue is unchanged. a.Using indifference curve
1.Suppose the government introduces a $1000 poll tax and reduces the personal income tax rate so that total tax revenue is unchanged.
a.Using indifference curve analysis, show how much the tax rate would have to fall.
b.Using indifference curve analysis, show what the efficiency gains would be in the labor-leisure choice.
c.Using indifference curve analysis, show what the efficiency gains would be in the consumption-saving choice.
d.Would this tax reform be vertically equitable?
e.Would this tax reform be horizontally equitable?
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