Which of the following is true?
A)Individuals prefer excise taxes.
B)Individuals prefer lump- sum taxes.
C)Lump- sum taxes give individuals fewer choices than excise taxes.
D)Excise taxes impose smaller individual costs than lump- sum taxes.

Question

Quizplus · Accepted Answer

Individuals prefer lump-sum taxes because they are a fixed amount and do not vary based on the individual's behavior or consumption. Excise taxes, on the other hand, are taxes on specific goods or services, which give individuals fewer choices and can impose higher costs if they consume those goods or services. Lump-sum taxes also allow individuals to make efficient decisions about how to allocate their income and resources since they do not alter relative prices.

Which of the Following Is True