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This year, State A raised revenues by increasing its general sales tax rate from 5 percent to 6 percent. Because of the increase, the volume
This year, State A raised revenues by increasing its general sales tax rate from 5 percent to 6 percent. Because of the increase, the volume of taxable sales declined from $782 million to $688 million. In contrast, State Z raised revenues from its 5 percent sales tax by expanding the tax base to include certain retail services. The volume of services subject to tax was $60 million. Required: a. Compute the additional revenue raised by State A. b. Compute the additional revenue raised by State Z. Complete this question by entering your answers in the tabs below. Compute the additional revenue raised by State A. Note: Enter your answers in dollars not in millions of dollars
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