If the redistributive character of the tax system is measured by looking at the additional taxes paid by high-income individuals and reduction in taxes to low-income individuals,the dollar amount of redistribution will be _____.
A)overestimated
B)underestimated
C)estimated correctly
D)estimated improperly,possibly over or under

Question

Quizplus · Accepted Answer

The dollar amount of redistribution will be overestimated because it does not account for behavioral changes in response to taxation, such as tax avoidance or changes in income reporting, which can affect the actual redistribution achieved.

If the Redistributive Character of the Tax System Is Measured