Assignment:
Read the article on a proposed tax increase on e-cigarettes in the state of Washington and answer the following questions:
1. In your opinion, is it a good idea to impose a heavy tax on e-cigarettes? Why or why not? If the government needs extra revenue, is this tax a better option than other taxes? (Hint: analyze the effects of this tax in terms of inefficiency and deadweight loss)
2. In the letter the ATR sent to the Washington Legislature, they make the claim that small business owners will bear the burden of this tax even though it is collected from the consumers. Do you agree with this prediction? Why or why not?