You have been hired as an economic advisor for a politician running for national office. At a recent campaign event, the politician said that corporations are paying too much in taxes and are funding most of the federal government’s operations. When you speak to the politician after the event, what would you say?

a. "I can’t believe you said that! Everyone knows that taxes on cigarettes and alcohol (excise taxes) represent the largest source of tax revenue for the federal government."
b. "Good job! You will win this election based on your sound economic knowledge."
c. "So close! Maybe no one will catch your error. Corporate and estate taxes are about equal and are tied for the largest sources of federal tax revenue."
d. "We have a great deal of work to do. On the news tonight, I predict there will be an expert correcting you and questioning why anyone would vote for you."

d. "We have a great deal of work to do. On the news tonight, I predict there will be an expert correcting you and questioning why anyone would vote for you."

Explanation:

At the recent, the politician said that all the corporations are paying too much taxes and are helping the federal government to fund most of their operations. As an economic adviser to the politician, I would inform him that corporations are paying taxes as per the rules and guidelines of the federal tax laws and it is large source of revenue to the federal government to run most of its welfare schemes.

Hence in the news debate tonight, there will be some expert correcting the politician and will question him why people will vote him and what is his future plans on economics and taxes.

Thus the answer is --

d. "We have a great deal of work to do. On the news tonight, I predict there will be an expert correcting you and questioning why anyone would vote for you."