The differential taxation of inputs does not create an excess burden.
A) True
B) False
C) Uncertain

Question

Quizplus · Accepted Answer

Differential taxation of inputs can create distortions in the market and may result in reduced efficiency as it may alter the production and consumption patterns of goods and services. This may lead to a loss of surplus or welfare loss, also known as an excess burden. Therefore, the statement is false.

The Differential Taxation of Inputs Does Not Create an Excess