A 5 percent tax is going to be applied to a $100,000 tax base. What can be said about the revenue collected assuming static tax analysis?

Question

Quizplus · Accepted Answer

Static tax analysis assumes that there will be no change in behavior among those paying the tax. Since the tax rate is a fixed percentage and the tax base is also fixed, the total revenue collected can be calculated as follows: 5% of $100,000 = $5,000. Therefore, the total revenue collected will be $5,000.

A 5 Percent Tax Is Going to Be Applied to a $100,000