The concept of tax sufficiency:
A)suggests the need for tax forecasting.
B)suggests that a government should estimate how taxpayers will respond to changes in the current tax structure.
C)suggests that a government should consider the income and substitution effects when changing tax rates.
D)All of the choices are correct.
E)None of the choices are correct.

Question

Quizplus · Accepted Answer

Tax sufficiency suggests that a government should estimate tax revenue based on the expected response of taxpayers to changes in the tax structure, including the income and substitution effects. Therefore, tax forecasting, considering taxpayer response, and understanding the effects of tax rate changes are all necessary in achieving tax sufficiency.

The Concept of Tax Sufficiency