In Singapore, property taxes on an automobile can exceed the purchase price of a new automobile.Assuming that the tax is a fixed percentage of market value, which of the following does this tax represent?
(i) a policy in which private incentives are used to reduced the traffic externality on congested roads in Singapore
(ii) the government's direct control over the number of automobiles that are purchased
(iii) a policy in which private incentives are used to reduce automobile pollution
A)(i) and (ii) only
B)(i) and (iii) only
C)(ii) and (iii) only
D)(i), (ii) and (iii)

Question

Quizplus · Accepted Answer

The tax represents a policy where private incentives (the high cost of owning a car) are used to reduce traffic congestion (i) and pollution (iii) by discouraging excessive use of automobiles. It does not directly control the number of automobiles purchased, but rather influences it through economic disincentives.

In Singapore, Property Taxes on an Automobile Can Exceed the Purchase