Tax policy is partly based on the notion that:
A) high taxes are preferable to low taxes.
B) government must always run a budget surplus.
C) markets never work efficiently.
D) people respond to financial incentives.

Question

Quizplus · Accepted Answer

Tax policy often includes the use of financial incentives, such as tax breaks or credits, to encourage certain behaviors or discourage others. This is based on the idea that people will respond to these incentives and adjust their behavior accordingly.

Tax Policy Is Partly Based on the Notion That