Economics of Public Issues (20th Edition) (The Pearson Series in Economics)
20th Edition
ISBN: 9780134531984
Author: Roger LeRoy Miller, Daniel K. Benjamin, Douglass C. North
Publisher: PEARSON
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Chapter 2, Problem 5DQ
Suppose you are about to start an innovative, high-tech company in one of two states. You expect before-tax profits to be about $100,000 per year. Both states have similar living conditions, climate, and other amenities, but the tax rate in state A is 17 percent, while the tax rate in state B is 7 percent. By how much will your annual after-tax profits differ between the two states? From a business perspective, which state is a preferred location?
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