Country A's tax system is more efficient than Country B's tax system if
A) Country A collects less tax revenue than Country B, and the cost to taxpayers is the same in both countries.
B) Country A collects more tax revenue than Country B, even though the cost to taxpayers is greater in Country A than in Country B.
C) the same amount of revenue is raised in both countries, but the cost to taxpayers is smaller in Country A than in Country c.
D) the same amount of revenue is raised in both countries, but the taxes are collected in a shorter amount of time in Country A than in Country B.

Question

Quizplus · Accepted Answer

Efficiency in taxation is generally measured by the ratio of revenue collected to the cost to taxpayers. Thus, if the same amount of revenue is raised in both countries but the cost to taxpayers is smaller in Country A than in Country B, then Country A's tax system is more efficient. A and B are incorrect because they only consider the amount of revenue collected or the cost to taxpayers, without comparing the two. D is also incorrect because the time taken to collect taxes is not a measure of efficiency.

Country A's Tax System Is More Efficient Than Country B's