When the government increases taxes to provide traditional public goods, such as national security, there tends to be
A)widespread benefits and costs
B)widespread costs and concentrated benefits
C)concentrated benefits and costs
D)widespread benefits and concentrated costs
E)widespread costs and either widespread or concentrated benefits

Question

Quizplus · Accepted Answer

When the government increases taxes to provide traditional public goods, such as national security, there tends to be widespread benefits and costs. This is because national security is a public good, which means that it is non-excludable and non-rivalrous. Non-excludable means that it is impossible to prevent people from enjoying the benefits of the good, even if they do not pay for it. Non-rivalrous means that one person's enjoyment of the good does not diminish another person's enjoyment of the good. As a result, everyone benefits from national security, regardless of whether or not they pay taxes.

When the Government Increases Taxes to Provide Traditional Public Goods