A government wishing to maximize its tax revenues should

Question

Quizplus · Accepted Answer

Option D suggests that the government should push tax rates up to the level where revenues are maximized, and then stop there. Going beyond that point will lead to a decline in revenues as individuals and businesses may start to evade taxes or reduce their tax payments. Hence, this option presents a logical and effective approach to maximizing tax revenues while avoiding negative consequences.

A Government Wishing to Maximize Its Tax Revenues Should