Economic policies often involve trade-offs between efficiency and equity.Fortunately,tax policy is an exception because it is easy to find taxes that are both efficient and fair.

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Tax policy often involves difficult trade-offs between efficiency and equity. It can be challenging to design taxes that are both efficient in raising revenue without imposing excessive burdens on the economy and fair in spreading the tax burden fairly across different income groups. Different tax systems may have different effects on economic activity, income distribution, and government revenue, and policymakers must consider these trade-offs when designing tax policy.

Economic Policies Often Involve Trade-Offs Between Efficiency and Equity