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How Much Does It Cost to Tax a Dollar of Revenue

Question 28

Multiple Choice

How much does it cost to tax a dollar of revenue away from the private sector and transfer it to the government in order to bail out a specific industry?


A) One dollar
B) Less than one dollar because the administration of and compliance with the tax ?laws creates jobs for people
C) Less than a dollar because of the excess burden resulting from the elimination of ?productive exchanges by the taxes
D) More than a dollar because collection of the taxes requires resources that would otherwise ?be available for private sector production

Correct Answer:

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