Which of the Following Statements Is Concerned with Efficiency Rather

question 60

Multiple Choice

Which of the following statements is concerned with efficiency rather than equity?

• A) It is not fair to tax the income earned by the wealthy at higher rates than the poor.
• B) Excise taxes on tobacco products affect low-income families the most and should be reduced.
• C) Our income tax system should be more progressive than it is now.
• D) Taxes cause distortions in markets and reduce social welfare.
• E) The best type of income tax is a flat tax because it treats everyone the same.

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Definitions:

Interest Income

Revenue earned from deposit accounts or investments that pay interest, such as savings accounts, bonds, or interest-bearing loans.

Eligible Dividends

Dividends that qualify for a reduced tax rate on dividend income in certain jurisdictions.

Federal Marginal Tax Rate

The rate at which the last dollar of a taxpayer's income is taxed, according to federal tax brackets.

British Columbia Resident

An individual who lives in or maintains a residency in the province of British Columbia, Canada.