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Congestion Tax and the Chamber of Commerce The citizens of Snarlsville will vote on a revenue-neutral...

Congestion Tax and the Chamber of Commerce

The citizens of Snarlsville will vote on a revenue-neutral congestion tax. Your task is to develop a position of the Chamber of Commerce on the proposed tax, that is, whether citizens of Snarlsville should vote yes or no. The key question is whether the tax will be good or bad for business in the city.

A. Briefly state the position of Snarlsville’s Chamber of Commerce (vote yes or no). Explain the economic logic of the position.

B. Consider Smileville, the other city in the regional economy. The city’s Chamber of Commerce is concerned about business activity in Smileville. Briefly state the position of Smileville’s Chamber of Commerce on Snarlsville’s congestion tax (vote yes or no). Explain the economic logic of the position.

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