Provide the best response to the following. 0 If you were "King" of a country, what type of tax system would you implement? 0 Would you tax, income or consumption? Why? 0 How would your tax system address equity vs. efciency? Note: Your answer should include: 0 Discussion about deadweight losses and administrative burdens. 0 Ways to address equity such as The Benets Principle, The AhilitytoPay Principle, Vertical Equity, Horizontal Equity. 0 Tax systems such as proportional, regressive and progressive. - According to the case study r'Who Pays The Corporate Income Tax\": 0 Who ultimately pays the corporate income tax? 0 How does this impact the overall economy (prices of goods and senices, output etc.) Case Study: Who Pays the Corporate Income Tax? The corporate income tax provides a good example of the importance of tax incidence for tax policy. The corporate tax is popular among some voters. Alter all, corporations are not people. Voters are always eager to get a tax cut and let some impersonal corporation pick up the tab. But before deciding that the corporate income tax is a good way for the government to raise revenue, we should consider who bears the burden of the corporate tax. This is a dimcult question on which economists disagree, but one thing is certain: People pay all taxes. When the government levies a tax on a corporation, the corporation is more like a tax collector than a taxpayer. The burden of the tax ultimately falls on peoplethe owners, customers, or workers of the corporation. Some economists believe that workers and customers bear much of the burden of the corporate income tax. To see why, consider an example. Suppose that the US. govemment decides to raise the tax on the income earned by car companies. At rst, this tax hurts the owners of the car companies, who receive less prot. But over time, these owners will respond to the tax. Because producing cars is less protable, they invest less in building new car factories. lnste ad, they in vest their wealth in other waysfor example, by buying larger houses or by building factories in other industries or other countries. With fewer car factories, the supply of cars declines, as does the demand for autoworkers. Thus, a tax on corporations making cars causes the price of cars to rise and the wages of autoworkers to fall. This issue arose to prominence in the early days oTthe Trump administration. The tax bill signed into law by President Trump in 2017 cut the corporate tax rate from 35 to 21 percent. The president's economic advisers argued that the longterm elTect of the policy would be increased capital accumulation, productivity, and wages. Critics of the bill agreed that these growth elTects would occur but believed they would be small. In their view, the main benets of the corporate tax cut would accme to the corporations' owners, who tend to be wealthy. Yet advocates and critics did agree on one thing: Evaluating the fairness of any tax change requires paying careful attention to tax incidence