Goals of efficiency and equity in tax policy are
A)complementary in most countries.
B)necessary for application of the ability-to-pay principle.
C)often in conflict with each other.
D)easier to achieve when tax codes are complex.

Question

Quizplus · Accepted Answer

Efficiency in tax policy often involves minimizing distortions in the economy, such as reducing the disincentives to work or invest that can be created by certain taxes. Equity, on the other hand, focuses on having a tax system that is fair and just for all individuals, regardless of their income level. Achieving both goals simultaneously can be challenging, as certain tax policies that promote efficiency may in fact be regressive and exacerbate existing inequalities. For example, a flat tax may be simpler and more efficient, but it could be seen as unfair to low-income earners who would be proportionally taxed at a higher rate than high-income earners.

Goals of Efficiency and Equity in Tax Policy Are