Why Is It Not Appropriate to Compare the Cost of Administering

question 6

Multiple Choice

Why is it not appropriate to compare the cost of administering a local real property tax with the cost of administering the federal individual income tax?

• A) Federal employees are better paid than are local employees.
• B) Local employees are often supported by federal grant funds raised by the income tax.
• C) Federal income tax revenue is larger than local real property tax revenue.
• D) The costs of collecting the individual income tax must include compliance cost as well as administrative cost; there is no significant compliance cost for the typical real property tax.

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