How To Calculate Government Revenue From Tariff

This represents that part of the loss in consumer surplus which is transferred to the government in the form of money the revenue effect a tariff.

How to calculate government revenue from tariff. For instance in 2013 the state of new jersey collected a total of 8 235 billion in sales and use tax revenues which was approximately 30 5 percent of the 27 billion the state government collected from all taxes and fees for the same period. D none of the above. Government however has gained quite a lot in the form of tariff revenue 300 million in this case the cross hatched area. If a tariff of 10 per unit is introduced in the market then the government will raise in tariff revenue.

The tariff inclusive price will be 3 1 33 4. Please show the numbers for example the domestic consumption will decrease from 600x to 500x. One dollar one vote metric b. Foreign producers finally lose.

Add each tax payment made during the legally defined tax collection period to arrive at total tax revenue. A b c and the government loses its entire initial tariff revenue d e. Once again pause the video and see if you can work through that. This also says you must show your work.

The country as a whole therefore loses b c d e. What are the impacts of tariff on domestic consumption domestic production imports and government s tariff revenue. A tutorial on how import prices increases consumer surplus and decreases producer surplus the impact of tariffs and the deadweight loss to society. Tariff revenues always equal the amount of duty times the quantity of goods imported under it.

Compared to the case of a tariff starting from zero the main difference is this extra and now necessary loss of tariff revenue. If a tariff of 10 per unit is introduced in the market then the deadweight loss will equal. A discussion of tax reform policies that could accompany tariff reform and lessen potential revenue losses follows. So the tariff revenue collected by the government well we went from a world price of 2 per pound to a domestic price of 4 per pound so it was a 2 per pound tariff.

Hence here the revenue collected equals p 1 p 2 xq 3 q 4 the area r in the figure. Terms of trade effect calculate the effective rate of protection for the domestic mp3 player industry following the imposition of a 20 percent tariff on the imports of mp3 players. Effective rate of protection d. The government s 300 million gain more than offsets the 175 million of lost consumer surplus.