The two main competing goals in the design of a tax system are

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Efficiency refers to the ability of a tax system to raise revenue with minimal economic distortion, while equity refers to fairness in the distribution of tax burden among individuals and groups. These two goals often compete with each other, as policies that increase equity may decrease efficiency, and vice versa. Therefore, the design of a tax system involves balancing these two objectives.

The Two Main Competing Goals in the Design of a Tax