An important objective in designing a tax system is to
A)design a system that minimizes inefficiency for a given amount of revenue raised.
B)design a system that raises the revenue required for the government's debt-service obligations.
C)raise the maximum possible revenue.
D)not intervene in the market economy because this only causes inefficiencies.
E)eliminate all deadweight loss.

Question

Quizplus · Accepted Answer

Designing a tax system that minimizes inefficiency for a given amount of revenue raised is important because it allows for the government to collect the necessary revenue while minimizing the negative effects on economic activity. This can include minimizing the impacts of deadweight loss, reducing distortions in the market, and promoting economic growth. While raising the maximum possible revenue may seem like an attractive option, it can lead to higher levels of inefficiency and economic distortion, which can have negative consequences for the overall economy.

An Important Objective in Designing a Tax System Is to