Real Property Taxes Tend to Have Significantly Lower Compliance Cost

question 15

Multiple Choice

Real property taxes tend to have significantly lower compliance cost per dollar of revenue raised than do individual income taxes because:

• A) local governments administer property taxes.
• B) real property taxes are taxpayer passive while income taxes are taxpayer active.
• C) individual income taxes yield vastly more revenue than do real property taxes.
• D) the statement is inaccurate: real property compliance costs are actually higher.

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Definitions:

Variable Factor

In economics, it refers to any input whose quantity can be changed in the short term to affect production levels.

Increasing Returns to Scale

A situation in which output increases by a greater proportion than the increase in inputs used.

Average Costs

The total cost of production divided by the total quantity produced, reflecting the cost per unit of output.

Isocost Line

A graph representing all combinations of inputs that have the same total cost.