The most efficient tax possible is a
A)lump-sum tax.
B)marginal tax.
C)proportional tax.
D)value-added tax.

Question

Quizplus · Accepted Answer

A lump-sum tax is the most efficient tax possible as it imposes the same amount of tax on every individual regardless of their income or consumption. This tax does not influence individuals' decision-making process, minimizing any economic distortions that other taxes may have. Additionally, the collection and enforcement costs associated with a lump-sum tax are low, making it cost-effective to implement.

The Most Efficient Tax Possible Is a