To: TAXATION BUREAU Date: April ,2018
From: Budget Manager
Subject: COMPANY COMPARISON
The government receives revenues in the form of taxes from businesses and individuals. The tax departments have specific charges that may be reviewed when they fail to hit the target. An increase in the level of taxation may appear as an easy way of increasing the amount of taxes. However, various factors need to be carefully evaluated to make sure this is a success. This includes items such as the elasticity of demand and the impact of the legislation on the price of the product. Maine is faced with problems of insufficient revenues and may consider relooking at the tax policy. This memo is a case study of the various options that Maine may consider and their implication.
Maine may consider doing nothing and maintaining the status quo. This implies that the snack food will continue being classified amongst the sales of grocery staples. This category is exempted from taxation hence the authority will fail to increase its revenues. The tax policy is fair as the various institutions and individuals are taxed at a similar rate. The overall snack tax will amount to zero in that fiscal year.
Direct the Bureau to rewrite the instruction may seem the best idea. There would be a reclassification of the snacks and would yield a tax totalling to $10 million annually. However,…
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