Impli cit Tax Rat es and Clientele Effects. Consider three taxpayers who are in the following tax…


Impli cit Tax Rat es and Clientele Effects. Consider three taxpayers who are in the forthcoming tax brackets:

The BTROR on a benchmark boarding is 10% (i.e., Rb= 10%). Compute the equilib - rium BTROR and the involved tax rebuke on a tax-exempt bond under each of the forthcoming three choice assumptions.

a. Alice is the margina l investor.

b. Brad is the margina l investor.

c. Camille is the final investor.

d. Which taxpayer (Alice, Brad, or Camille) would Camille like to see be the margina l investor? Why?