What is one reason that deadweight losses are so difficult to avoid
A)Taxes distort the decisions that people make.
B)Income taxes are not paid by everyone.
C)Consumption taxes must be universally applied to all commodities.
D)Administrative burden and deadweight loss reflect a clear tradeoff to policymakers.

Question

Quizplus · Accepted Answer

Taxes create incentives for individuals and businesses to change their behavior in order to minimize their tax liability. This distortion in decision-making can lead to a deadweight loss, which is difficult to avoid because it requires balancing the need for revenue with the desire to minimize the negative effects of taxes on the economy.

What Is One Reason That Deadweight Losses Are So Difficult