Problem
The nonprofit Tax Foundation rates Louisiana as having the 42nd best state tax system for businesses in the United States. (This is actually an improvement; we used to be 50th.) The tax system includes oddities such as the following sales tax structure for water (from Louisiana Department of Revenue table R-1002). Activity Sales tax Sales of water for nonresidential use. Does not apply to water sold in containers such as a jug, bottle or carton. 2% Sales of water sold directly to the consumer for residential use. Does not apply to water sold in containers such as a jug, bottle or carton. 0% Sales of steam. 2%. What specific activities are being incentivized by this tax structure? Do you expect that these taxes would be progressive, regressive, or proportional? Explain.