Which of the following statements is true ?
A) Sales, excise, and flat-rate taxes violate the ability-to-pay principle of taxation fairness because each results in a smaller burden on the poor than the rich.
B) Government failure may occur if voters are rationally ignorant.
C) Special-interest group political pressure results only from programs for which benefits outweigh costs.
D) Majority-rule voting and benefit-cost analysis result in the same projects being undertaken.

Question

Quizplus · Accepted Answer

Government failure may occur if voters are rationally ignorant. This is true because voters who lack information or have little motivation to inform themselves may make poor choices when electing officials or making decisions through the ballot initiative process, leading to suboptimal outcomes. The other statements are not true: Sales, excise, and flat-rate taxes may actually result in a larger burden on the poor than the rich; Special-interest group political pressure can occur for programs that have net costs; Majority-rule voting and benefit-cost analysis involve different methodologies and do not necessarily result in the same projects being undertaken.

Which of the Following Statements Is True