Question ID:PT21 S3 Q11 Passage:Raising the tax rate on essential goods—a traditional means of increasing government revenues—invariably turns low- and middle-income taxpayers against the government. Hence government officials have proposed adding a new tax on purchases of luxury items such as yachts, private planes, jewels, and furs. The officials claim that this tax will result in a substantial increase in government revenues while affecting only the wealthy individuals and corporations who can afford to purchase such items. Stem:The answer to which one of the following questions would be the most relevant in evaluating the accuracy of the government officials’ prediction? Correct Answer Choice:CChoice A:Will luxury goods be taxed at a higher rate than that at which essential goods are currently taxed? Choice B:Will the revenues generated by the proposed tax be comparable to those that are currently being generated by taxes on essential goods? Choice C:Will sales of the luxury items subject to the proposed tax occur at current rates once the proposed tax on luxury items has been passed? Choice D:Will the proposed tax on luxury items win support for the government in the eyes of low- and middle-income taxpayers? Choice E:Will purchases of luxury items by corporations account for more of the revenue generated by the proposed tax than will purchases of luxury items by wealthy individuals?