The city of Granby, Colorado recently enacted a 1.5% surcharge on vacation cabin rentals that will help pay for the city's new elementary school. This surcharge is an example of ________.
A) A sin tax to discourage undesirable behavior
B) A government fine
C) An earmarked tax
D) A sin tax to discourage undesirable behavior and an earmarked tax
E) None of these

Question

Quizplus · Accepted Answer

An earmarked tax is a tax that is specifically designated for a particular purpose, in this case, to fund the construction of a new elementary school in Granby. This surcharge is not a sin tax, as it is not designed to discourage any undesirable behavior. It is also not a government fine, as it is not a punishment for any violation of the law.

The City of Granby, Colorado Recently Enacted a 1