Deadweight losses from taxation are associated with:

Question

Quizplus · Accepted Answer

Deadweight losses from taxation occur when taxes distort the incentives that people face, leading to a reduction in economic efficiency. This is the case with most taxes, as they typically change the relative prices of goods and services, causing people to alter their behavior in ways that are not socially optimal. Lump-sum taxes, on the other hand, do not distort incentives and therefore do not generate deadweight losses. Social security survivor's benefits are not typically subject to taxation, so B is not a relevant choice. C is incorrect, as all taxes have efficiency losses to some degree.

Deadweight Losses from Taxation Are Associated With