A flat tax system simplifies the tax code, making decisions more likely to be based on economic considerations rather than tax incentives, as it typically involves a single tax rate applied to all income levels, reducing the influence of tax considerations on economic decisions.

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With a Flat Tax

Question 101

Multiple Choice

With a flat tax,

A) Vertical inequities cannot occur.
B) Everyone pays the same amount of absolute tax.
C) Decisions are based on economic considerations rather than tax incentives.
D) The government's ability to change the mix of output is increased.

Correct Answer: