Question

Suppose the government is concerned that research assistants already make too little money and, therefore, wants to minimize the share of the tax paid by employees. Of the three tax proposals, which is best for accomplishing this goal?
a) The proposal in which workers pay the entire tax
b) The proposal in which each side pays half the tax
c) The proposal in which employers pay the entire tax
d) None of the proposals is better than the others

Answer 1

Answer:

d) None of the proposals is better than the others

Explanation:

To discuss each choice, the proposal in which workers pay the entire tax is not ideal since the main concern of the government is to find a way to reduce the amount they pay in taxes. This proposal will increase the research assistants' liabilities instead of decreasing it. The proposal in which each side pays half the tax still does not minimize the taxes since the assistants will still have a burden of half the liability. On the other hand, if employers pay the entire tax, this will increase cost to the company leading to some assistant losing their jobs. This makes the situation worse.