Read the problem and then answer the following questions. Investigation 1: The C
ID: 2779752 • Letter: R
Question
Read the problem and then answer the following questions.
Investigation 1: The Centerville mayor calls a special meeting of the town council to come up with ways to raise more revenue.
1. What are some options the town council might explore for increasing revenue?
2. Which options might they reject for fear of driving more people out of town or forcing more businesses to close?
Investigation 2: The mayor and town council decide that the long term answer to Centerville's problems is to attract new businesses to the town. To jump-start the process, the town council uses some capital funds remaining from a renovation of police headquarters to buy an abandoned warehouse from a business that has moved to the city. By selling municipal bonds, the council hopes to find a renovation of the warehouse into a town center and indoor mall with space for town offices and leasing space for several small businesses.
1. (A) If revenue is already a problem, how can the town spend money to buy a warehouse?
(B) How would the proposed indoor mall help attract small businesses?
2. How would new businesses help Centerville's revenue problem?
3. What are some tax incentives the mayor and town council could use to attract new businesses to Centerville?
Explanation / Answer
Investigation 1:
1.
Town council might explore following options for increasing revenue;
· By promoting small level business activities. Through this town council will receive revenue as a fees & tax.
· By providing employment to youth, town council may collect some tax revenue.
· Every local government have own fixed assets so by utilising its’ idel fixed assets town council may get some additional revenue.
2. Local government can promote business activities in the town and make sure a proper place for small businessman so that they will not fear of loss due to large shopping mall in near by city.
Apart from this when local government will promote business activities than youth will get employment thus as a result they will not drive out of the town.
Investigation 2:
1. (A).
No doubt revenue is the main problem here but there are some options also;
Town council uses some capital funds remaining from a renovation of police headquarters.
Town council can receive money through issuing government securities because as this town is not developed thus investors will give money in the hope of good return.
1. (B).
Proposed indoor mall help attract small businesses because local government will fix a proper place to them. Apart from this as it is clear that government want to stop the migration of local public to other city hence local government emphasis on such business will attract small businessman for participating in business activities.
2.
New business will help in maximizing the revenue for local government because as the business activities will go up, local government will receive more fees & taxes from such business. Apart from this local government will also receive taxes from the increased number of employees.
3.
Local government can offere some tax holiday, tax exemptions for small businessman and for some big businessman also so that they can involve in the business activities.
Local government can lower the fees & taxes on business activities so that more and more people can be motivated to do business.
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