The government is about to undertake a large program of public works, repairing and upgrading bridges…
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The government is about to undertake a large program of public works, repairing and upgrading bridges around the city. The Department of Economic Development, Jobs, Transport and Resources has decided that the public works will be funded by a new tax on taxi companies .The Minister for Public Transport has instructed you to recommend which of the two proposals the department should pursue. Concisely state the principal recommendation that arises from your analysis, clearly explain the rationale behind your recommendations, and any trade-offs that are involved. Also, state any additional recommendations on subsequent lines. Finally, be sure to address any questions raised in the scenario that are not directly related to your recommendations. Here is the proposal and analysis on each company:
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Technifi Expert’s Answer:
Proposal 1 is preferable one as compared to proposal 2 as lump sum tax might be a burden upon the companies. They might not complete the exact quantity of trips in a day as required for attainment of profits. Therefore, in such cases it would be problematic for companies to pay their taxes. Hence, proposal 1 is preferable where we are attaining profits and paying our taxes based upon unit tax per taxi trip.
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