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If the government wanted to reduce alcohol consumption in the United States, would a state tax or a federal tax be more effective? Group of
If the government wanted to reduce alcohol consumption in the United States, would a state tax or a federal tax be more effective?
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A state tax on alcohol consumption would be more effective because state taxes affect more buyers.
A state tax on alcohol consumption would be more effective because the elasticity of demand is higher at the state level than at the federal level.
A federal tax on alcohol consumption would be more effective because the elasticity of demand is higher at the federal level than at the state level.
A federal tax on alcohol consumption would be more effective because suppliers cannot as easily avoid the tax simply by shipping alcohol to other states.
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