Imagine that you are an analyst for the Congressional Budget Office and have been asked to comment on the adoption of a bill proposing the replacement of the $.625 per gallon tax on gasoline retail sales (roughly 20%) to a gross-receipts tax on shippers, refiner and wholesalers.

a) what are the likely impacts of such a change?

b) Differentiate this approach from a value-added tax.

c) The bill's sponsor claims that this change will lower the price of gasoline for consumers by placing the tax on producers. Do you agree or disagree with this claim? Why or why not?