You just won a contest and have been appointed State

You just won a contest and have been appointed State of CT Tax Commissioner (you might be asking, why did I enter such a contest? :)).

Your primary goal is twofold: raise revenue and make the tax code more efficient.

You have to decide which goods to tax, which goods to raise taxes on and which good to lower taxes. Consider your knowledge of elasticity, supply and demand. You need to close a $500 million budget gap for the State.

1. Alcohol, tobacco and gasoline are already heavily taxed. Should you raise these taxes? Explain your answer.

2. Medical services, electricity and fruits and vegetables are not taxed. Should you start to tax these? Explain your answer.

3. Other than what is listed above, find 3 additional goods or services you would tax to raise more revenue. Explain your answer.

4. Which 3 goods would you eliminate taxes on and why? Explain your answer