The mayor of Workerville proposes a local payroll tax to fund a new water park for the city. The mayor proposes to collect half the tax from workers and half the tax from firms. Workers will bear a. An equal share of the tax in comparison to firms. B. A greater share of the tax in comparison to firms. C. A smaller share of the tax in comparison to firms. D. All of the above are possible

Tax is the legal financial charge imposed by the government on citizens' income. It helps the government to fund its social welfare programs. Its non-payment is an offense.

In this case, to fund a new water park in the city, Mayor wants to collect half the taxes from the workers and half the tax from firms. Mayor will only become successful to share the tax burden equally when both the demand and supply of labor become equally elastic.

Hence, workers will bear an equal share of the tax in comparison to firms.

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