Jurisdiction B$$s tax system consists of a $6\mathrm{.}5$ percent general sales tax on retail goods and selected services. Over the past decade, the average annual volume of sales subject to this tax was $$830$ million. The jurisdiction needs to increase its tax revenues by approximately $$8\mathrm{.}3$ million each year to finance its spending programs. The taxing authorities are considering two alternatives: a $1$ percent increase in the sales tax rate or a new $2$ percent tax on the net income of corporations doing business in the jurisdiction. Based on recent economic data, the annual net income subject to the new tax would be $$440$ million. However, the jurisdiction would have to create a new agency responsible for enforcing and collecting the income tax. The estimated annual cost of the agency is $$500,000.$ Jurisdiction B borders four other taxing jurisdictions, all of which have a general sales tax and two of which have a corporate income tax.

Required:

$1.$ Based on a static forecast, how much incremental revenue would Jurisdiction B raise under each alternative?Jurisdiction B$\text{'}$s tax system consists of a $6\mathrm{.}5$ percent general sales tax on retail goods and selected services.

Over the past decade, the average annual volume of sales subject to this tax was $$830$ million. The

jurisdiction needs to increase its tax revenues by approximately $$8\mathrm{.}3$ million each year to finance its

spending programs. The taxing authorities are considering two alternatives: a $1$ percent increase in the sales

tax rate or a new $2$ percent tax on the net income of corporations doing business in the jurisdiction. Based

on recent economic data, the annual net income subject to the new tax would be $$440$ million. However,

the jurisdiction would have to create a new agency responsible for enforcing and collecting the income tax.

points awarded

The estimated annual cost of the agency is $$500,000.$ Jurisdiction B borders four other taxing jurisdictions,

all of which have a general sales tax and two of which have a corporate income tax.

Required:

Based on a static forecast, how much incremental revenue would Jurisdiction B raise under each

alternative?

Note: Enter your answers in millions rounded to $1$ decimal place.