04+Tax+Burden

A beginning diagram is shown below.

The initial diagram has two grids. Each grid depicts a $10 per unit tax. In the left grid is an inelastic demand curve and in the right grid is a unit elastic demand curve. Add a new layer. In each grid draw the rectangles to represent the buyer burden, and the selle burden (hint: there is no seller burden in the left grid). Then for each grid, calculate the total tax collected, and the amounts paid by the buyer and the seller respectively. Upload the completed diagram to this Wiki page, then in the explanation field report your calculations for the total amount of tax collected and amounts paid by buyer and seller, respectively. ||
 * Num || Name || Diagram and Explanation ||  ||
 * 1 || Sally Smith

The first graph represents a case where the supply is perfectly inelastic. The introduction of a $10 per unit tax does not change the equilibrium quantity. The total tax revenue is depicted by the red box. Total tax revenue is calculated by multiplying the quantity demanded, 300, by $10 tax. Therefore, total tax collected is $3000. The buyer carried the entire tax burden and paid $3000 in tax.

The second graph depicted is more elastic than the first graph. The introduction of a $10 per unit tax will cause the equilibrium quantity to be reduced. Total tax revenue is calculated by multiplying the quantity demanded, 250, by $10 tax. The total tax collected is $2500. The initial equilibrium price was $10. The new equilibrium price is $15. The increase in price that the buyer pays is $5. The decrease in price received by the seller is $5. Both the buyer and the seller shares equal burden on the tax paid and contributed $1250 each to the total tax collected. ||  || || The graph on the left is representing something that is is perfectly inelastic for the demand. This graph is perfectly inelastic because when a $10 tax is added on the the product there is no no change in demand and all the burden that is there, is being brought upon on the buy. This leaves the seller with no burden. ON the graph to the right represents the demand as being unit elastic. As the tax goes up the demand is going down, increasing the price of the item. There is a new equilibrium of $15 which puts burden on both the buyer and seller of $1250. ||  || How would we calculate that? Using today's gdp information, I got a resulting revenue that equaled Federal spending. ||  ||   ||
 * 2 || John Doe
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 * 4 || if we use the above diagrams ,we can conclude that ,1 if demand is perfectly inelastic tax burden falls entirely on the buyer ||  ||   ||
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 * 7 || Now, if we were to consider how to calculate a progressive tax on income of "Federal taxes may only be calculated using the equations, with one equation per year, where y is tax and x is income in that year, the first equation with the first optional number must be used until all federal debts are repaid: y=x*Arctangent(natural_log(x)/Euler's_constant^2.82870019165956)/π"
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