Suppose the country of Mankiwland has a new king, King Gregory. For the purpose of efficiency King Gregory's chief economic advisor would encourage him to design his country's tax system to minimize (i)
Deadweight losses from taxes.
(ii)
Administrative burdens from taxes.
(iii)
The tax payments themselves.
(iv)
Government expenditures to correct for market failures.
A)(i) only
B)(i) and (ii) only
C)(iii) and (iv) only
D)(i), (ii), (iii), and (iv)

Question

Quizplus · Accepted Answer

Minimizing deadweight losses and administrative burdens from taxes are both important goals for efficiency in the tax system. Minimizing tax payments themselves may not be feasible as the government needs revenue to function. Minimizing government expenditures to correct for market failures is important, but not directly related to the design of the tax system.

Suppose the Country of Mankiwland Has a New King, King