Tax preferences create more _____ than a broad-based income tax because they change the relative prices to the taxpayer of earning different types of income.

Question

Quizplus · Accepted Answer

Tax preferences can lead to welfare loss because they distort economic decisions by making certain types of income or expenditures more attractive than others, leading to inefficiencies in the allocation of resources.

Tax Preferences Create More _____ Than a Broad-Based Income Tax