Taxpayers would be better off if a tax could just raise revenue without ______.

Question

Quizplus · Accepted Answer

When a tax alters the prices that taxpayers face, it can distort their behavior and lead to unintended consequences. For example, if a tax is placed on cigarettes, it may discourage people from smoking, but it could also lead to an increase in black market sales or a shift towards other unhealthy habits. Similarly, if a tax is placed on luxury goods, it could discourage people from purchasing them, but it could also create a sense of unfairness or inequality. By contrast, a tax that simply raises revenue without altering prices or preferences would be less likely to have these types of effects.

Taxpayers Would Be Better Off If a Tax Could Just