If the consumer has the same tax bill under a head tax as under an income tax,then the consumer will be indifferent between the two taxes.

Question

Quizplus · Accepted Answer

The consumer's preference between a head tax and an income tax depends not only on the current tax bill but also on factors like the impact on their marginal incentives to work, the predictability of future tax liabilities, and the fairness of the tax system. Even if the current tax bill is the same, these other factors can lead to a preference for one tax system over the other.

If the Consumer Has the Same Tax Bill Under a Head