The relevant objective in designing a tax system is to

Question

Quizplus · Accepted Answer

The relevant objective in designing a tax system is to provide the revenue required for the government's expenditure obligations while minimizing inefficiency for a given amount of revenue raised. Choice A is incorrect because raising the maximum possible revenue may negatively impact economic growth and discourage investment. Choice B is impossible to achieve since any tax system will have some level of deadweight loss. Choice C is partially correct, but it is important to design a tax system that raises the revenue required for government expenditure obligations while not excessively burdening taxpayers. Choice D is incorrect because the optimal tax system should intervene in the market economy to correct market failures and achieve important social objectives. Thus, choice E is the best option.

The Relevant Objective in Designing a Tax System Is to