Because the tax system in Texas is not easily adjusted to ups and downs in the economy,it is said to _____.

Question

Quizplus · Accepted Answer

The statement suggests that the tax system in Texas is not easily adjusted to ups and downs in the economy, which implies that it lacks elasticity. Elasticity refers to the degree to which tax revenues change in response to changes in economic activity. A tax system that is elastic can generate more revenue in good economic times and less revenue in bad economic times. Therefore, the lack of elasticity in the Texas tax system makes it difficult to adapt to changing economic conditions.

Because the Tax System in Texas Is Not Easily Adjusted