Give an example of a tax that you have paid in the past. Did it affect your purchase decisions? Do you think the tax created dead weight loss? Why or why not? How is the market for the good affected by the tax?
I have paid the Eagle County Airport taxes and fee's on a rental car that I had to rent one time for a road trip, the vehicle that I owned no longer liked to go over the passes. I had no choice at the time to rent the car, but after paying about 28% on the total in local taxes and fees, I decided that it was not worth the car rental. Although it was fun to drive a brand new car! The rental rate seemed like a good deal while I was making the reservation and they show you your total cost plus airport taxes and fees once you are filling out the paper work.
I do think that the airport taxes and fee's create dead loss for the rental car companies, and it causes the prices to increase for the consumers. But being that we live in a resort area, the rich come to play here and do not even blink an eye but for the locals - OUCH!
The market is effected for the good by the tax because the Town of Gypsum and Eagle County use the tax collected to maintain and up keep the airport, public right of ways and other government services that benefit everyone.
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