In the area of taxation, the trade-off between equity and efficiency
A)never occurs since efficient taxes are often the most progressive.
B)is relevant as efficient taxes are often regressive.
C)is irrelevant.
D)is relevant because efficient taxes are often progressive.

Question

Quizplus · Accepted Answer

The trade-off between equity and efficiency in taxation is relevant as efficient taxes can often be regressive, meaning that they place a heavier burden on lower-income individuals. Therefore, policymakers must balance the desire for an efficient tax system with the goal of promoting equity.

In the Area of Taxation, the Trade-Off Between Equity and Efficiency