In designing a tax system, policymakers have two objectives that are often conflicting. They are
A)maximizing revenue and minimizing costs to taxpayers.
B)efficiency and minimizing costs to taxpayers.
C)efficiency and equity.
D)maximizing revenue and reducing the national debt.

Question

Quizplus · Accepted Answer

Policymakers have to balance efficiency, which means maximizing economic growth and minimizing distortions in market decisions caused by taxes, and equity, which involves distributing the tax burden fairly across society. Maximizing revenue and minimizing costs to taxpayers are also important objectives, but efficiency and equity are the most commonly cited conflicting objectives in tax policy design. Reducing the national debt is also a goal for some policymakers, but it is not as fundamental as balancing efficiency and equity.

In Designing a Tax System, Policymakers Have Two Objectives That