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Taxes Work it Out: Question 4 of 4 How does the excise tax on imported trucks benefit American automakers? Whom does it hurt? How does
Taxes Work it Out: Question 4 of 4 How does the excise tax on imported trucks benefit American automakers? Whom does it hurt? How does inefficiency arise from this government policy? The excise tax leads to in the price of imported trucks. Since American trucks are for imported trucks, the effect of the tax is to the demand for American-made trucks, which leads to a price for them. As a result, buyers of both domestic and foreign trucks pay prices because of the tax on foreign trucks. Inefficiency arises because some mutually beneficial transactions no longer occur due to the prices for trucks caused by the tax
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