Massachusetts Senator and one-time presidential candidate John Kerry understand the concept of tax avoidance. Kerry avoided paying $500,000 in taxes in Massachusetts by docking his yacht in Rhode Island. Rhode Island repealed sales taxes and annual excise taxes on yachts in 1993, making “the state something of a nautical tax haven.” Discuss the likely behavior changes of yacht-owning Massachusetts residents if Massachusetts lowered its tax rates on yachts, and how these changes would affect Massachusetts’s tax revenue.
(Lenght 150 - 250 words)
If Massachusetts lowers it's tax burden on the yachts then people might buy more yachts. It depends on the elasticity of demand of yachts in Massachusetts. If people desire to buy yachts and they couldn't buy because of the higher taxes, then with the lowering of the taxes people of Massachusetts will consider buying yachts.
Massachusetts Senator and one-time presidential candidate John Kerry understand the concept of tax avoidance. Kerry avoided...