When people alter behavior in response to taxes, which of the following is not true?
A)Excess burden is created.
B)Inefficiency occurs.
C)Tax shifting might occur.
D)The excise tax rate can increase.

Question

Quizplus · Accepted Answer

The statement "the excise tax rate can increase" is not true in this context. If people alter their behavior in response to a tax, the government may consider changing the tax rate or structure, but the tax rate itself does not increase as a result of taxpayer behavior.

When People Alter Behavior in Response to Taxes, Which of the Following