Taxes levied on broad bases tend to distort choice ________ and impose ________ excess burden than taxes on more sharply defined bases.

Question

Quizplus · Accepted Answer

Taxes levied on broad bases distort choices less because they apply more uniformly across a wide range of goods and services, leading to fewer distortions in consumer and producer behavior. Consequently, they impose a smaller excess burden compared to taxes on more narrowly defined bases, which can significantly distort economic decisions and lead to higher inefficiencies.

Taxes Levied on Broad Bases Tend to Distort Choice ________