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MCQ 28

An efficient tax

A tax for which high income taxpayers pay a smaller fraction of their income than do low income taxpayers is known as
a.
a proportional tax.
b.
a regressive tax.
c.
an equitable tax.
d.
a progressive tax.


ANSWER: 

B
a.
minimizes the administrative burden from the tax.
b.
does all of the things described in these answers.
c.
raises revenue at the smallest possible cost to taxpayers.
d.
minimizes the deadweight loss from the tax.


ANSWER: 

B
Which of the following taxes can be supported by the benefits principle of taxation?
a.
All of these answers can be supported by the benefits principle of taxation.
b.
progressive income taxes used to pay for national defence
c.
petrol taxes used to pay for roads
d.
property taxes used to pay for police and the court system
e.
progressive income taxes used to pay for antipoverty programs


ANSWER: 

A

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