An Efficient Tax System Is One That

question 500

Multiple Choice

An efficient tax system is one that
(i) maximizes tax revenues.
(ii) minimizes deadweight losses from taxes.
(iii) minimizes administrative burdens from taxes.
(iv) promotes equity across taxpayers.

• A)(i) only
• B)(ii) and (iii) only
• C)(i), (ii), and (iii) only
• D)(i), (ii), (iii), and (iv)

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Definitions:

Capital Deficiency

A situation where a company's liabilities exceed its assets, indicating that it does not have enough capital to meet its financial obligations.

Credit Balances

Represent amounts owed to creditors or customers, typically seen in liability, equity, and revenue accounts.

Income Sharing

An arrangement where income is distributed among participants or stakeholders based on predetermined criteria, often found in partnerships, cooperatives, and certain employment agreements.

Equity Purchase

The act of buying ownership interest in a company, typically through the acquisition of shares, giving the purchaser a stake in the company's profits and assets.