The two main competing goals in the design of a tax system are
A)efficiency and productivity.
B)efficiency and equity.
C)efficiency and the elimination of distortions.
D)applying the direct and excess burden of taxes evenly.
E)growth and productivity.

Question

Quizplus · Accepted Answer

Efficiency refers to a tax system that is easy to understand, administer, and comply with. Equity, on the other hand, refers to a tax system that distributes the burden of taxes fairly across different income groups. These two goals are often in tension with each other as policies that promote efficiency may not necessarily promote equity and vice versa. Finding the right balance between efficiency and equity is a key challenge in designing a tax system.

The Two Main Competing Goals in the Design of a Tax