As a possible approach to eliminating the government budget deficit, increasing taxes on the rich only would
A) lead to a significant increase in tax revenues.
B) not lead to a significant increase in tax revenues.
C) lead to a greater number of entitlements.
D) lead to an increase in real GDP.

Question

Quizplus · Accepted Answer

Increasing taxes on the rich only would not lead to a significant increase in tax revenues because there are relatively few rich people, and the amount of revenue gained from increasing their taxes would not be significant enough to eliminate the government budget deficit. Furthermore, increasing taxes on the rich only might result in them avoiding taxes by hiding their wealth or moving it to offshore accounts, leading to even less revenue than anticipated.

As a Possible Approach to Eliminating the Government Budget Deficit