Farmers, Though a Small Proportion of the Population, Can Impose

question 241

True/False

Farmers, though a small proportion of the population, can impose a large total cost to taxpayers in the form of agricultural subsidies because the average cost imposed on each individual taxpayer is small and not given much attention by a large number of taxpayers.

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Definitions:

Excess Burden

The amount by which the burden of a tax exceeds the total revenue collected. Also called deadweight loss.

Tax Revenue

The revenue collected by governments from taxes.

Tax

A compulsory financial charge or some other type of levy imposed upon a taxpayer by a governmental organization.

Excess Burden

The cost to society created by market inefficiency, particularly through taxation or other government policies, beyond the immediate financial effects.