The tax with the minimum excess burden of taxation is most desirable from an efficiency standpoint because _____.
A)it suggest that people substituted away from the tax by a considerable amount
B)it minimizes tax shifting
C)it produces the least social cost per dollar of revenue raised
D)it will raise the most revenue for government

Question

Quizplus · Accepted Answer

The minimum excess burden means that there is the least amount of efficiency loss associated with the tax, indicating that it produces the least social cost per dollar of revenue raised. Therefore, it is the most efficient option. Choices A, B, and D do not necessarily indicate efficiency, as they can be influenced by factors other than efficiency.

The Tax with the Minimum Excess Burden of Taxation Is