The larger the deadweight loss from taxation,the larger the cost of any government program.

Question

Quizplus · Accepted Answer

Deadweight loss represents the inefficiency and distortion caused by taxation, resulting in a reduction of economic welfare. Any government program that is funded by taxation will have to bear the cost of this deadweight loss, which is directly proportional to the size of the tax. Therefore, the larger the deadweight loss from taxation, the larger the cost of any government program.

The Larger the Deadweight Loss from Taxation,the Larger the Cost