Please read the articles "Industry Set for Fight to Keep Corporate Jet Tax Breaks" and "Tax Break for the Yachting Class (As word files, or view them on-line at: http://www.nytimes.com/2011/07/08/us/politics/08lobby.html?r=0 and http://www.jewishworldreview.com/cols/will102899.asp). Write a paper that discusses the following issues or answers the questions: 1. Briefly describe the issues addressed in these two articles. Are the proposed taxes on private jets in 2011 and the luxury taxes of the 1990's examples of the Benefit Principle or the Ability-To-Pay Principle? Why? Would these taxes be considered Sumptuary taxes? Why or why not? 2. Are these taxes Progressive or Regressive? Why? Are they created in the interest of efficiency or equity? Why? Do you think they are "Fair? Why or why not? 3. Discuss the potential Excess Burden of these taxes based on the likely relative elasticity of demand for luxury goods. Why is it that the expected tax revenue from the sale of these goods either didn't or is unlikely to materialize? I 4. How is the excess burden that we see on our graphs made "real" in the case of the luxury taxes of the 1990's and potentially in the private jet tax proposals of 2011? Who suffered the most from these taxes and how does it relate to the shifting of the tax burden between consumers and producers based on relative elasticity? 5. What do these articles say about the politics of taxation? What role did the special interest lobbies play, and why were they so vocal (again, relate this to the shifting of the tax burden)? Why do policy-makers expect these taxes to be well-received by the general population? Please read the articles "Industry Set for Fight to Keep Corporate Jet Tax Breaks" and "Tax Break for the Yachting Class (As word files, or view them on-line at: http://www.nytimes.com/2011/07/08/us/politics/08lobby.html?r=0 and http://www.jewishworldreview.com/cols/will102899.asp). Write a paper that discusses the following issues or answers the questions: 1. Briefly describe the issues addressed in these two articles. Are the proposed taxes on private jets in 2011 and the luxury taxes of the 1990's examples of the Benefit Principle or the Ability-To-Pay Principle? Why? Would these taxes be considered Sumptuary taxes? Why or why not? 2. Are these taxes Progressive or Regressive? Why? Are they created in the interest of efficiency or equity? Why? Do you think they are "Fair? Why or why not? 3. Discuss the potential Excess Burden of these taxes based on the likely relative elasticity of demand for luxury goods. Why is it that the expected tax revenue from the sale of these goods either didn't or is unlikely to materialize? I 4. How is the excess burden that we see on our graphs made "real" in the case of the luxury taxes of the 1990's and potentially in the private jet tax proposals of 2011? Who suffered the most from these taxes and how does it relate to the shifting of the tax burden between consumers and producers based on relative elasticity? 5. What do these articles say about the politics of taxation? What role did the special interest lobbies play, and why were they so vocal (again, relate this to the shifting of the tax burden)? Why do policy-makers expect these taxes to be well-received by the general population
