To set a tax rate at the appropriate level to maximize its tax revenues, a government must engage in

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To maximize tax revenue, a government must engage in dynamic tax analysis, which takes into account how changes in tax rates affect taxpayers' behavior and economic activity. Static tax analysis, which assumes no change in taxpayer behavior, is not sufficient for setting optimal tax rates. Debt-free tax analysis and ad valorem tax analysis are not relevant in this context.

To Set a Tax Rate at the Appropriate Level to Maximize