How Much Does It Cost to Tax a Dollar of Revenue

question 418

Multiple Choice

How much does it cost to tax a dollar of revenue away from the private sector and transfer it to the government to finance a government program?

• A) one dollar
• B) less than one dollar because the administration of and compliance with the tax laws creates jobs for people
• C) more than a dollar because collection of the taxes requires resources that would otherwise be available for private sector production
• D) more than a dollar because of the excess burden resulting from the elimination of productive exchanges by the taxes
• E) Both c and d are correct.

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Definitions:

Centralized

A system or structure where the decision-making authority is concentrated at a single point or in a single person.

Peripheral Members

Those participants in a group or organization who have a lower level of involvement or are marginal to the core activities.

Core Members

Individuals who are central to a group or team, typically taking on leadership roles, heavily influencing decision-making, or being crucial to the group's function.

Clique Network

A social network characterized by tightly knit groups of individuals who frequently interact with each other, often to the exclusion of outsiders.