Which of the following taxes does NOT lead to a deadweight loss?

Question

Quizplus · Accepted Answer

A lump-sum tax does not lead to a deadweight loss because it is a fixed amount that individuals or corporations have to pay regardless of their income or behavior. It does not affect their incentives to work or consume, so there is no distortionary effect on the market. On the other hand, proportional and progressive income taxes and proportional taxes on property can lead to deadweight losses because they create disincentives for people to work more, invest, or spend, which reduces the overall welfare of the society.

Which of the Following Taxes Does NOT Lead to a Deadweight