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What Is One Problem with Using a Clarke Tax to Finance

Question 69

Multiple Choice

What is one problem with using a Clarke tax to finance government provision of a public good?


A) People tend to overstate their preferences for the public good when a Clarke tax is imposed.
B) The government may decide against providing the public good,even when it would be efficient to do so.
C) The Clarke tax is not a fair tax,because everyone pays the same amount regardless of income.
D) The revenues collected from the Clarke tax may not cover the cost of the public good.

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