Unit IV Essay Scenario: The city leaders of Lawsona suffered a budget shortfall
ID: 371462 • Letter: U
Question
Unit IV Essay Scenario:
The city leaders of Lawsona suffered a budget shortfall last year. In their planning for the new fiscal year, they feel they can raise the needed revenue by imposing a sales tax on the consumption of the citizens of the community. They are particularly entranced with the possible tax revenue that can be gained from a redeveloped mall in the center of the city. The mall, a joint project between the city and a developer, was rebuilt from the ruins of an abandoned shopping center that had been an eyesore for many years. The new mall serves many of the inner city residents who rely on public transportation and live either below or at the poverty line. The mall has been a huge success and has been hailed as the vanguard of a new revived downtown shopping area. A sales tax, however, would impact to a greater extent the many low- and middle-income shoppers who shop downtown, for they would pay a greater percentage of their income to this tax than wealthier shoppers.
Respond to the scenario, and discuss if the sales tax is a good or bad move for the city of Lawsona. Make sure to clearly state your stance on the situation, and explain in detail your reasoning behind your decision. Support your opinion with concepts from this unit's reading.
Your response should be a minimum of 500 wds in APA . All sources used, including the textbook, must be referenced; paraphrased and quoted material must have accompanying citations.
ORIGINAL WORK PLEASE
Explanation / Answer
In my opinion it is a bad move to impose sales tax on the people of Lawsona. Sales tax is the tax imposed on consumers on the sale of goods and services. It is imposed by the government and uses as a source of revenue for the government. But the ultimate sufferer is the middle class and lower class families who hard work to meet their budget. The business’ also gets affected as the consumers buy less product as the price increases due to increase in tax and the demand and supply reduces. The consumer behavior gets affected with the introduction of sales tax. The tax increase the price of the product and the demand reduces with increase in price. The companies need to reduce their production to be in line with the demand. In this case, as the City of Lawsona imposes the sales tax the consumers the city residents would be affected. The leaders of Lawsona is mainly targeting on the revenue that may come from the redeveloped mall in the center of the city and the main reason behind the success of the mall is the common public who live near to the poverty line. They buy the commodities from the mall and if the sales tax is imposed the price of the commodities will increase. The consumers would be required to reduce their purchase volume in order to balance their budget and may completely avoid buying some products that are not necessary. This will reduce the demand of the products and the supply also reduces considerably as per the demand. The businesses may increase the price in order to balance their profit but still overall profit reduces with reduced demand. This condition may affect the mall’s success and as the customers reduce the revenue from the mall also reduces. The tax is imposed mainly concentrating on the revenue that may come from the mall and the purpose may not get fulfilled. A significant percentage of the people in Lawsona are poor or middleclass and their living conditions become worse with the sales tax. The authorities should implement steps that will help to improve the living standards of the people and should not try to make it worse. They can adopt so many other methods to increase the revenue like increasing the tax on rich people who would not have much impact by the rise in tax. The tax should be imposed only based on the income in order to show fairness to all people. The public also would support the government and the profit from the redeveloped mall also does not get affected. Hence the sales tax is a bad move on the City of Lawsona.
I have not used any textbook as reference for the answer and it is based on my knowledge.
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