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2. The sales tax rate applied to all purchases within a state was 0.04 (4 percent) throughout 2006 but increased to 0.05 (5 percent) during all of 2007. The state government collected all taxes due, but its tax revenues were equal to $40 million each year. What happened to the sales tax base between 2006 and 2007? What could account for this result?

  • math - ,

    higher tax, no increased revenue means the tax base went down.

    Population decrease? Less shopping? Embezzlement?

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