The Benefits-Received Principle of Taxation Is Not Often Used Because

question 44

Multiple Choice

The benefits-received principle of taxation is not often used because

• A) if tax payments are linked to the benefits received, taxpayers tend to overstate the benefits that they receive from public goods.
• B) it leads to an overproduction of public goods.
• C) it is difficult to determine the values individual taxpayers place on goods and services that are produced using tax revenue.
• D) it leads to less equality in the after-tax distribution of income.

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Definitions:

North American Free Trade Agreement

An agreement among the United States, Canada, and Mexico designed to remove tariff barriers between the three countries.

NAFTA Member Nations

The countries that are part of the North American Free Trade Agreement, aimed at reducing trading costs, increasing business investment, and helping North America be more competitive in the global marketplace.

Trade Restrictions

Measures applied by governments to control the exchange of goods and services across its borders, including tariffs, quotas, and embargoes.