A tax system achieves efficiency when:

Question

Quizplus · Accepted Answer

Efficiency in a tax system is achieved when the costs of tax collection are minimized, as this allows for the maximum amount of resources to be available for private consumption and investment. While fairness and equilibrium are also important, they do not necessarily guarantee efficiency. The right people bearing the burden of taxes is important for equity, but it does not necessarily result in efficiency if the costs of collection are high.

A Tax System Achieves Efficiency When