Which of the following would NOT be considered a desirable characteristic of a tax system?
A)Balance between sectors.
B)Inelasticity.
C)Neutrality.
D)Flexibility.

Question

Quizplus · Accepted Answer

Inelasticity means that the tax revenue does not change as much as the change in the tax base (for example, a tax on cigarettes may still generate the same revenue even if people smoke less). This is not a desirable characteristic as it does not promote efficient allocation of resources and may not generate enough revenue to cover government expenditures. The other options (A, C, and D) are all desirable characteristics of a tax system. Balance between sectors ensures that the tax burden is distributed fairly among different segments of society. Neutrality means that the tax system does not influence economic decisions and outcomes. Flexibility allows the tax system to adapt to changing economic and social circumstances.

Which of the Following Would NOT Be Considered a Desirable